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Morning Coffee: The inexperienced bankers on $175k. Goldman Sachs’ mistake

MONEY-RAIN

Next time someone informs you that investment banking has fallen out of favour with young people, and that young people want to become financial technology (‘Fintech’) professionals instead, then be assured that they are talking rubbish. – Especially if they are making these claims about elite MBA students.

In fact, elite MBA students are still heavily into banking, Roxanne Hori, associate dean for corporate relations and career services at NYU Stern, tells the Financial Times. Around 30% of NYU Stern’s MBAs will go into banking this year. “Banks have come back,” declares Hori.

Needless to say, it helps that banks have come back laden with cash. The FT confirms that the fresh MBAs who join banks as first year associates, sometimes with no banking experience at all, have had a pay rise. They can now get a base salary of $125k and a sign-on bonus of $50k. Last year, banks were dangling salaries of $110k and the sign-on status was unclear.

Separately, in proof that Goldman Sachs is fallible, the bank has been fined $7m for making a stupid mistake. In 2013, a software configuration error meant that the bank’s computers accidentally sent 16,000 options orders, mispriced at $1, to exchanges. This resulted in 1.5m options contracts being made available during pre-market trading and to Goldman losing $38m before the error was corrected. Bloomberg reports that the problem happened after Goldman switched to a new system that was not properly configured. It didn’t help that an employee on the new system failed to notify ‘Mission Control’, an interestingly named Goldman unit that monitors options trading. All staff associated with the error have since left the bank.

Meanwhile:

Why did it take nearly four weeks between Deutsche receiving the report from BaFin and Mr Jain announcing his departure? As the head of a big European fund manager says: “It looks very bad for Anshu — until now it looked as if he had gone of his own accord.” (Financial Times) 

Anshu Jain accused of personally lobbying for Christian Bittar’s giant bonus with the claim that Bittar and a colleague were, “good guys, the best on the Street”. (Financial Times) 

Deutsche Bank has been hiring for its electronic trading system. (Financial News)  

Index Giant FTSE Russell wants to double its headcount in London. (Financiall News)

61 year–old Jack Levy is leaving Goldman Sachs after spending 15 years as an investment banker there. (Business Insider) 

J.P. Morgan just hired a US energy banker from Bank of America. (Bloomberg) 

Former Brevan Howard trader Chris Rokos has hired economist Jacques Cailloux from Nomura Holdings to help launch his new hedge fund. (Finalternatives) 

LIBOR trader Tom Hayes asked a broker to pay for his £1k meal. (Reuters)  

Greg Rattray, a former U.S. Air Force commander for information warfare and a cyber-expert at the National Security Council under President George W. Bush, no longer works as JPMorgan’s chief information security officer. He’s been reassigned after one year. (Bloomberg) 

BNP Paribas has to pay $16.1m to a London-based couple after enabling them to lose all their inheritance. (Reuters)  

If you’re labelled smart at a young age, you are will be less likely to challenge yourself in later life. (The Atlantic) 

You too can now wear a 3d printed Batsuit. (Mirror) 

Will your banking job be replaced by a machine? (WeForum) 

Methods of inferring how your interview is going based upon the interviewer’s body language. (Irish Examiner)

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