It's not unusual for banks to indulge in what is commonly known as 'upgrading', but rarely has it been quite so brazen as at Nomura.
You will (or might) recall that back in July Nomura suddenly reversed its policy of expanding its emerging markets business and pulled the plug on various traders it hired the year before. In June, it eliminated heads of businesses like Nick Oxlade (head of European credit sales), and Manolo Pedrini (head of European rates sales after Fred Jallot, its former global head of credit and asset-backed securities in Europe left voluntarily.
Three months later, Bloomberg says Nomura is back in action. After eliminating 50 people in total, it now has a hiring plan. Bloomberg says Steve Ashley, who runs global trading at Nomura, didn't just want to cut costs when he had a change of heart about many of his key employees, he wanted to 'replace senior staff and change the leadership in London.'
This means more hiring. And it has not gone unnoticed (by us). We suggested in late July that Ashley seemed to have something afoot when he promptly recruited some of his former RBS colleagues (James Konrad, Biagio Lapolla and Robbie Anderson) for flow rates trading. Since then, Bloomberg notes that Ashley has also hired John Gousias from hedge fund Millennium Capital Management to run credit trading. He's reportedly expanding a whole new business called Client Financing and Solutions (CFS) which creates structured credit products for clients. He also wants to increase credit trading revenues by 25% with his shiny new team. Let this be a warning to anyone who's settled into their comfortable trading job for the long term - at Nomura or elsewhere. Banks are rarely satisfied.
Separately, have you ever considered that you might be that thing? - An 'insecure overachiever'? Laura Empson, an academic, who has written a book on the subject has been talking to the BBC and getting various insecure overachievers to confess. One of them is Jeremy Newman, the former CEO of accountancy firm BDO: "It feels like a constant need to prove you should be where you are," he says. Empson says IOs are characterized by fierce ambition and a profound sense of their own inadequacy.
If you have self-diagnosed as an insecure overachiever, there may not be much you can do to get rid of it. Under Empson's formulation, over-achievement stems from a childhood in which there was psychological, financial, or physical insecurity. Banks and professional services firms manipulate the syndrome and set out to recruit overachievers, because they know they'll work very, very hard (and overachieve).
You can, however, be aware of the colleagues who trigger your competitive over-achievement, find a job that doesn't play upon it, and stop reformulating your goals higher and higher each time you reach one. "Once an insecure overachiever has achieved a goal, they tend to discount it quickly and set the bar even higher," says Empson. " So when you have achieved something, remember how concerned you were about not succeeding, how often you have succeeded in spite of these concerns, and challenge yourself to believe the evidence of your persistent pattern of success."
Justin Gmelich, the top credit trader at Goldman Sachs, says the corporate bond market has become "super-procyclical" and that untested changes to market structure could cause liquidity issues when the market turns. He also said that Goldman has obviated the need for human traders to respond to pricing requests (which were previously coming once every six seconds), by building a pricing engine for 14,000 different bonds. (Business Insider)
Deutsche Bank's Japanese head of M&A and Japanese COO are both leaving. (Bloomberg)
Jeremy Monnier, the former global head of FX structuring at Deutsche Bank, joined Barclays. (FX Week)
Bank of America hired Stefan Burgstaller, an analyst from Goldman Sachs, to be vice chairman of investment banking for Europe. (Financial News)
This is what all the different kinds of quant investing (factor investing, risk parity, systematic global macro, event driven arbitrage, statistical arbitrage, CTA) actually mean. (Bloomberg)
Law firm embraces denim. (Financial News)
Watch your children play football to boost your testosterone levels. (BPS Digest)
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