Why do people leave financial services careers? Many are culled – European and US banks have announced 100,000 job cuts in the past year according to the Financial Times. But layoffs aren’t the only reason why people quit. There’s also the relentlessness of regulation.
Hans Morris, the former president of Visa, hasn’t worked in investment banking, but he has a pretty good handle on the investment banking mindset. “The cliché would be ‘regulation is driving me crazy’,” Morris told the FT. “But it’s not like that,” he added. ” It is the scale of what has been asked and the constant wave of new regulatory initiatives. That’s what gets you down.”
Morris suggests top people are leaving Wall Street banks because the dead hand of regulation has made investment banks leaden places to work. By comparison, he says financial technology firms offer the opportunity to develop “new, nimble products without being held back”.
Morris works in fintech now. So do Vikram Pandit, ex-CEO of Citi, John Mack, ex-CEO of Morgan Stanley, and Blythe Masters, a former trader at J.P. Morgan. With many fintech firms not paying well and looking for wealthy benefactors, it clearly helps that these former bankers earned their money elsewhere first. Fortunately, they did so before banking became so horribly oppressed.
Separately, traders at RBS have been thrown a bone by their CEO. In an interview with Bloomberg, Ross McEwan reiterated that RBS has no intention whatsoever of giving up certain of the trading activities in its investment bank. “Why would we give up great strategic positions where we are some of the biggest players of these market places, where we can make money? We’ll show that over the next three to four years,” McEwan said. Which strategic positions would these be? RBS’s flow rates trading business was traditionally strong. It’s also one of Europe’s top three players in FX, structured finance, and investment grade corporate debt.
Goldman Sachs has 9,000 technologists and 3,000 strategists. “It’s recognised here that the value of a senior person sitting in technology — to really help us drive our business forward — is certainly as valuable as someone in an income-producing seat.” (Financial Times)
Banks are revamping short term rates trading desks ahead of the expected rate rise. (WSJ)
Blackrock says the high yield crisis is no big deal. (CNBC)
Why you need to be afraid of the high yield market. (Business Insider)
91-year-old hedge fund founder offers reassurance that things are not as bad as they seem. (NY Times)
Arki Busson is retiring, again. (WSJ)
Trafigura is paying $775m (£512m) in share-based bonuses to 600 staff after it banked bumper profits from oil trading in turbulent markets. (Guardian)
Mizuho is now ready to hire fixed income derivatives traders in London. (Financial News)
Machine learning’s first cheating scandal: ‘Oversubmissions tilted the balance of forward progress on the LSVRC from algorithmic advances to hyperparameter optimization.’ (DSWalter)
NASA’s hiring astronauts. You’ll have to go through a two year evaluation, pass physical tests and master a variety of Russian language, robotics, and flight-training skills, among other requirements. (QZ)
Botox on the house at Yahoo. (Mashable)