Back in the day, you could lose your job at an investment bank and attempt to move to the regulator for a reduced salary but improved lifestyle. Now, even that door appears to have closed. Although the FSA may still be hiring big names like William Samuel from Lazard, it’s severely constrained when it comes to hiring anyone else.
As various sources point out today, this is because the cost of running the FSA has spiraled crazily out of control. It costs 30 times more to run the regulator now than it did 15 years ago, reports the Telegraph. In an effort to overcome this, headcount has been frozen for the second year running and pay is being increased by only 3.5%.
Separately, the Economist has a big article in its latest edition, which merely underscores why you probably want to be working for a big bank now. “Compensation is going to get crushed,” says the head of one large investment bank, told its author. “Investors are concerned about returns…[Their] bigger concern is about the split between shareholders and employees.”
The Economist, along with most others, predicts that the big banks will win whilst most others will slim down or pull out. Based on investment banking fees earned in 2011, the big banks are (in descending order): JPMorgan, Goldman Sachs, Bank of America Merrill Lynch, Morgan Stanley, Citigroup, Deutsche, Credit Suisse, BarCap, UBS…
Nomura, despite, claiming to be winning market share and keen to consolidate its position, is not on this list.
The FSA is now formally investigating UBS. (Guardian)
Pay in the banking industry has been high for too long and needs to be "corrected," says the chairman of RBS. (CityAm)
Trader says RBS tried to scapegoat people over libor manipulation claims. (Bloomberg)
Yes, Sarkozy’s financial taxation tax would kill high frequency trading. (Deus X Macchiato)
Crazy 'ol times doing a Masters in Finance at the London Business School. (Student blog)
Lucas Van Praag is living in one room, with pages of the bible plastered everywhere. (Money is the way)
It’s ok: everyone will find work as a security guard at the Olympic games. (Telegraph)