Banks in London and New York have started making redundancies in sub-prime mortgage related areas. But it's not happening here, say recruiters in Australia.
Deutsche Bank in London is understood to have ditched around seven traders on its collateralised debt obligation (CDO) desk, and both Lehman and Bear Stearns have chopped heads at their US mortgage units. But while Australian institutions such as Basis Capital, Absolute Capital and Macquarie Bank have been left limping by the sub-prime crisis, there are no signs of job cuts - yet.
"Sub-prime is such a small part of the market that I can't see Australian firms letting people go because of it. If anything, banks see it as an opportunity," says Blaise Habgood at Sydney-based Bradman Recruitment.
Oliver Darkes at recruitment firm Carmichael Fisher confirms CDO teams haven't been cut, but says CDO professionals are nevertheless keen to get out into other business areas: "They mostly want to move out of selling credit products and move into corporate advisory roles and evaluating credit risk."
But with debt markets all but shut down, Darkes says placing CDO refugees isn't easy: "Debt markets are tight; no deals are happening. In fact, they have all gone on holiday and left the analysts holding the desks."
People involved in selling and trading securitised products based on sub-prime collateral may regret it if they don't find a new niche soon, however: "In two months' time, those dodgy mortgage products in the US will be in default, and then there will be blood," predicts Darkes. "The approach here is to sit tight and see what happens, first in the UK and then Hong Kong and Singapore.''