Hint of recovery is enough to let the good times roll: Richard Lander looks back over a year of many embarrassments and more than a few large bonuses

FOR THOSE involved in trading shares and bonds, the only way was up in 1993. Up went the share indices, up went bond prices and up went futures as lower interest rates and the hint of a recovery inspired rapture in the markets.

With the good times back, salaries were on a roll unseen since the heady days of 1987. Traders, bankers and partners picked up telephone-number bonuses, with the Gang of 161 at Goldman Sachs pocketing a reputed dollars 5m each.

The mother of all payments belonged to Peter Wood, the man who invented Direct Line insurance for Royal Bank of Scotland. He will pocket a cool pounds 24m to wind up his deferred payment deal. And that is on top of an pounds 18m bonus.

It was not all unalloyed joy for the City. For the second successive year, a huge bomb devastated offices. The blast in Bishopsgate killed a photographer and led to road-blocks and diversions around the Square Mile.

Embarrassments also continued to shake City institutions. Peter Rawlins resigned as chief executive of the Stock Exchange after Taurus was found to be unworkable; the cost of the abortive share settlement system was put at up to pounds 300m.

The Lloyd's insurance market staggered from court case to names' revolt on a weekly basis as it prepared to enter the brave new world of corporate capital in 1994. Losses spiralled towards pounds 7.5bn over four trading years. Personal insurers fared little better as the Securities and Investments Board found that thousands of people had been wrongly advised to opt out of occupational pension schemes.

The men charged with guiding the City fortunes changed during 1993. Eddie George took over as Governor of the Bank of England, hoping to have greater say over the timing of interest rates than his predecessor. Alas, the pro-independence minded Norman Lamont was unceremoniously turfed out of the Treasury in favour of Kenneth Clarke, who preferred to run the show himself.

This being the first year of the unified tax-and-spend statement, both Chancellors got a Budget. Lamont put up taxes, Clarke confirmed them and threw in a few of his own.

Both men listened politely to the advice of their panel of seven wise men but had probably made up their minds before doing so. Both also looked on from the sidelines with some glee at the latest currency market horror movie, ERM 2 (This Time It's In French).

Talking of white elephants, some enjoyed rather a good year. Canary Wharf came out of receivership and the go-ahead was finally given for the Jubilee underground line that should make it viable. The Channel tunnel was handed over to the operators and should start taking traffic next year, albeit a year and some pounds 5bn above and beyond the original estimates.

Other projects, however, established white elephant status with remarkable speed. Tales of marbled halls, executive jets and Rabelaisan expense accounts ensured the premature departure of the mercurial Jacques Attali from the hot seat at the European Bank for Reconstruction and Development, set up to channel money to the emerging economies of the old eastern bloc.

Almost as under-employed as an EBRD lending officer were the staff of Euro Disneyland, near Paris, where the failure of Europe's holidaymakers to take to the Magic Kingdom in the midst of a French winter led to a pounds 620m loss and a huge headache for the parent Disney Corporation.

Not for the first year, some of the strangest news to emerge came from Lonrho. Those who predicted at the start of the year that Tiny Rowland would end it by burying the hatchet with the Fayed brothers and trying to take it to his chosen successor Dieter Bock would have been told to seek medical help. Things got stranger when Lonrho backed a Libyan-made film about the Lockerbie air disaster before pulling out when a public outcry ensued.

On the corporate scene, some of the most interesting stories sprang from the mergers and takeovers that never happened. The most spectacular deal to collapse was that between Renault and Volvo, after senior management at the Swedish car group staged a palace revolt. At home, the vastly different house styles of National & Provincial and Leeds Permanent building societies meant that deal collapsed as well.

One non-merger that really ended in tears was that of Owners Abroad. Just four months after escaping the clutches of a pounds 290m bid from Airtours, the travel group revealed a huge slump in trading fortunes. Exit left both chairman and chief executive.

King of the collapsed deal in 1993, however, was Pearson. As he opened the champagne to celebrate the purchase of StarTV, the Asian satellite broadcaster, Lord Blakenham found he had been foiled by none other than Rupert Murdoch. In the same vein, Pearson was pipped to the post for Macmillan, the US book publisher. It snared a catch in the end, taking the Extel number-crunching group off the hands of United Newspapers.

Other media barons had a happier time, none more so than Michael Green of Carlton. As of last New Year's Eve he controlled no ITV companies; a year later he controls two, having snapped up Central after the Government relaxed takeover regulations. As the ITV map prepares for a huge shake-up, the management at LWT - the best paid defenders outside the Premiership - are trying to fend off the raiders from Granada.

The hotel of corporate misery was a little quieter this year as its chief occupants of recent years - property companies - checked out to climb the upward part of their cycle. Nonetheless, some important guests checked in, notably Ferranti, which suffered the ultimate humiliation of being told by GEC that its assets were not worth 1p a share.

Others to spend more time with their bankers included the Queens Moat hotel group, the container leasing firm Tiphook, the Spring Ram bathrooms empire and GPA, the Irish aviation group.

No year would be complete without a ritual humiliation of the Serious Fraud Office, and in 1993 the plodding detectives got it in the neck twice. First, Asil Nadir, due to stand trial in connection with the collapse of Polly Peck, did a moonlight flit to his base in Northern Cyprus, determined not to let the buggers get him down. Then Roger Levitt, standing trial after his insurance group disappeared, copped a measly 180 hours of community service for his sins.

And, yes, another year has gone by without a trial of the Maxwell brothers, although a deal with creditors at least assured former employees of a decent pension. But there was no such happy outcome for BCCI's creditors after a Luxembourg court threw out a deal that had appeared signed and sealed. That one will run and run.