It's starting to look like European banks, for whom this year's bonus pools are thought to be particularly piddly, will need to sacrifice paying their bankers in London and Europe in order to compensate and retain their staff on Wall Street and in the U.S.
As we've noted before, bankers on Wall Street will be very displeased if they are paid badly again this year. Before Christmas, bankers at Barclays were said to be preparing a revolt at the prospect of receiving cash-capped bonuses for the second year running - something which unfortunately seems a distinct possibility. Equally, US M&A bankers had an excellent year in 2012, while European M&A bankers really didn't.
Disparities in M&A last year may be one reason why Deutsche Bank is today said to be thinking of cutting bonuses for its European bankers by 20% whilst cutting bonuses for its US bankers by only 10%. Another reason may well be the expectation that US banks on the whole will pay well this year, even while European banks pay badly. For example, Jon Terry, a compensation expert at PWC, is predicting that European banks will cut bonuses by between 20% and 40% compared to 2011, whilst Goldman Sachs is expected to increase its bonuses quite significantly this year and Citigroup is today said to be preparing bonus cuts of only 10%.
Leading European banks have struggled to gain their foothold in the U.S. market. Banks like Credit Suisse, Deutsche and Barclays will therefore be very loathe to lose U.S. staff to better paying local rivals. Unfortunately, this suggests that European bonus pools will be raided to keep their U.S. bankers happy.
Separately, we have the first positive sighting of Deutsche Bank's implied M&A hiring for 2013. Bloomberg reports that Mizuho plans to hire senior M&A bankers in the US and Europe in 2013 to cover all sectors from healthcare, to energy, and to technology, media and telecommunication. Mizuho's not exactly having a hiring rush, however: it plans to add no more than 10 people.
Morgan Stanley plans to trim 15% of its Asian investment banking jobs this week. Globally, it's only cutting 6% of staff. (Bloomberg)
Basel III and the need to raise capital ratios mean it makes sense for banks to sell their minority stakes in China. (WSJ)
Andrea Orcel has made a big hire and recaptured Piero Novelli for UBS from Nomura. (Financial Times)
The head of natural resources M&A is leaving Deutsche Bank. (Financial News)
Former head trader at Fulcrum has quit to live in South Africa. (FinAlternatives)
Schroders has summoned the services of McKinsey, again. (Financial News)
Richard Balarkas, an electronic trading pioneer who left Credit Suisse in 2007, is returning as a consultant. (Financial News)
Lloyds has shut down its hybrid FX and rates desk after unearthing a rogue trader. (Telegraph)
Next week, a report will be released in which Jamie Dimon is criticized for inadequately supervising his traders. (Bloomberg)
In slow times, French bankers could soon have their hours cut. (Wall Street Journal)
What I learned about interviewing from Miss America. (The Daily Muse)
12 cognitive biases that prevent you from being rational. (Farnam Street)