I work in the wholesale funding unit of a major bank on Wall Street and ten years ago, my job used to be pretty exciting.
I came into this through an MBA in my late 20s. It was the mid-2000s and banking was a wild place to be. I’m an engineer by background, but when I looked around after the MBA it was clear that finance was a better bet than engineering. I start a trading trainee course and rotated into the wholesale funding department, where I stayed. I’ve been here ever since.
What does wholesale funding do exactly? Well, it’s up to us to maintain the liquidity for the entire investment bank. My department ensures the investment bank has cash when it needs it and remains solvent. It’s up to us to sum the funding requirements of all the wholesale bank units and to make sure everything’s covered.
This probably sounds like a good job and – yes – it was, once. Before the financial crisis hit, we had a lot of freedom and operated almost as part of the trading desk. The manager here determined how much risk we could take and we traded against it, usually in the interbank market and often overnight, or longer.
This changed when liquidity dried up in the wake of the financial crisis. Our team went from being a fairly unregulated subset of the trading business to being ground zero for the new regulatory restrictions. Suddenly, compliance and risk management were all over us. Liquidity is now our defining goal – we borrow at high rates on the repo market and bite the bullet on costs. We hold a lot of stale liquid cash just to be on the safe side. The liquidity extremists rule the roost here, even though it seems that the seeds of the next crisis are being sown in this homogeneous approach to bank funding. Where once I was a trader, now I’m just a glorified administrator and it kind of sucks.
So, why don’t I leave? Well, you know: kids, wife, the comfort that comes from doing the same thing for over a decade. I like my boss, I don’t travel and there aren’t many meetings. My job isn’t sexy any more and so there’s no one chasing me for it. Nor am I likely to get laid off. If I crane my neck, I can see my retirement cantoring over the hill and it simply doesn’t seem worth throwing it all away at this stage. Even so, I’m treading water. And that’s kind of ironic given the expectations that I had when I started out.
Jimmy Hagan is the pseudonym of a funding specialist at a bank on Wall Street