A managing director at Credit Suisse, who worked for nearly two years on the bank’s $1.2bn cost-cutting drive in its global markets business, which resulted in 2,000 lay offs, has now left the bank.
Edmund F. Taylor, a managing director who worked at Credit Suisse for over 20 years, departed earlier this month. Taylor’s latest role at the bank was head of global markets efficiency office, meaning that he was in one of several senior roles responsible for ensuring Credit Suisse’s trading floor shrinkage.
Taylor’s exit looks a little premature given that Credit Suisse has indicated that it wants to cut another CHF800m of costs from its global markets business by 2018. However, during the 18 months in which he worked on the Swiss bank’s restructuring programme, 4,000 people were laid off and around 30% of London employees departed.
An American, Taylor spent 20 years in operational and cost-cutting roles at Credit Suisse. He was previously global head of the fixed income wind-down within Credit Suisse’s ‘bad bank’, responsible for the disposition of $50bn in legacy positions including sub-prime mortgages, CDOs and around $37bn in real estate. Before this, he spent a year as chief operating officer of Credit Suisse’s securities business between 2008 and 2009.
Credit Suisse’s CEO Tidjane Thiam said in January that the bulk of job cuts in Credit Suisse’s trading functions were over. The bank’s global markets business performed particularly badly last year and was excluded from the recent rebound in macro trading after cutting its rates business last May. Costs still consumed 99.2% of revenues last year.
There’s one sense in which Credit Suisse’s market business is super-efficient, though– its revenues per dollar of risk-weighted assets now come in at $0.13, compared to $0.06 at Deutsche Bank and $0.04 at Bank of America.
Credit Suisse may currently be regretting its decision to cut back so drastically in its rates business after the recent recovery, but don’t expect a general rebound in hiring activity in the FICC space.
Speaking at a conference yesterday, Morgan Stanley president Colm Kelleher lauded its decision to cut 25% of its FICC headcount. “Clearly we were all running outsized fixed income businesses — far too much capital, far too much leverage, far too much liquidity trapped in, very sloppy way of dealing with derivatives — all that stuff,” he said.
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