London is not the most expensive city in the world: that distinction goes to Oslo according to analysts at UBS. However, London is notoriously expensive. UBS ranks it 10th among large cities globally for the cost of living – behind New York but ahead of Paris and Frankfurt – and says that once wages and purchasing power are taken into consideration, people in London are 17% worse off than New Yorkers and 4% worse off than people in Frankfurt.
Nevertheless, you’d think that a 32 year old single man, earning £360k a year gross and £191k net, should have been able to get by in the City.
This wasn’t the case for Kweku Adoboli. Nor does the problem appear to have been his £1k a week flat in Shoreditch. Reports instead indicate that Adoboli may have had gambling issues. Adoboli lost £123k with IG Index and at the time of his arrest was overdrawn to the tune of £4k. He had four bank accounts and two credit cards and had taken loans out with 8 pay day loan companies, including Wageday Advance, Wonga.com, Payday UK and Pounds to Pocket. On the day of his arrest, four of his accounts were overdrawn and one contained £4.
Adoboli was, clearly, a special case, but he highlights what has often been said anecdotally: financial services professionals are not necessarily good at managing their own money. Interest only mortgages have historically been common among investment bankers, as have costly divorces. The Financial Times reports that young bankers and traders are now investing in buy-to-let – despite indications that UK housing remains overpriced. Let Kweku Adoboli and his £4 bank account be a warning not to get too carried away.
Borut Miklavcic, former global head of liquid markets prop trading at Nomura, has set up a hedge fund, LindenGrove Capital. He is chief investment officer, and has lined up a team of six others who worked with him at Nomura. (Financial News)
More bad news for fixed income professionals at Morgan Stanley. (Businessweek)
The most influential women in investment banking are: Marisa Drew, co-head of the global market solutions group at Credit Suisse, Isabelle Ealet, global co-head of the securities division at Goldman Sachs, Allegra Berman, co-head of DCM at UBS, Alison Rose, head of markets and international banking at RBS, Catherine Flax, chief marketing officer for the wholesale business at JPMorgan. (Financial News)
Natixis has got a new investment division devoted entirely to structured products and volatility management. (Investment Europe)
Thanks to Mario Draghi, European banks aren’t actually deleveraging at all. (Bloomberg)
Stephen Byrne, an MD in Deutsche’s distressed team, has left. (Bloomberg)
Mining jobs appear to pay more than banking jobs. (Bloomberg)
The modellers’ hypocratic oath. (Mathbabe)
Sleep debt accumulated during the week can only be eliminated by going to bed 8 hours before your usual wake-up time. (Telegraph)
Bankers should behave at work as they do at home, declares Archbishop. (Telegraph)