If you work in the City of London, or indeed hold a finance job in the UK, news emerging this weekend is likely to be keeping you up at night.
Firstly, there’s the prospect of the UK losing the right to clear $570bn of euro derivatives. If this happens, the impact on financial services jobs will be huge. Xavier Rolet. CEO of the London Stock Exchange, believes job losses could hit six figures.
“We estimate, conservatively, that at a very minimum 100,000 jobs, in risk management, compliance, middle office, back-office support functions – by the way not just in London, up and down the country – are implicated in supporting this business and clearly could be at risk,” he told Bloomberg News.
Rolet believes, by the way, that this won’t happen - simply because there’s no other alternative to London in Europe. If the shift happens, it’ll be New York that will benefit.
More worryingly, there are growing fears that prime minister Theresa May will opt for a ‘hard Brexit’ – in other words, getting the EU departure over with swiftly and brutally. For the City, this is very bad news indeed and will almost certainly mean losing access to the single market, and therefore the all-important passporting rights into the EU for financial services organisations.
Large U.S financial services organisations like Morgan Stanley, BlackRock and Goldman Sachs, which met with the prime minister in New York this week, don’t want to see this happen. What they do want, however, is some more clarity on the deal the UK will end up with. If she cannot provide this, they will have shifted jobs to another EU state long before Article 50 is triggered.
How bad will this be? Well, the FT has calculated that 590,000 people are employed by the 5,000 firms that rely on passporting from the UK as a way to do business in the EU. Not all of these are in investment banks, of course, but City insiders say that banks use passporting for around 20% of their UK activities.
“We reckon that around about a quarter is related to the EU in some way or another,” says John McFarlane, who chairs both The CityUK, a lobby group, and Barclays.
Robert Rooney, chief executive of Morgan Stanley International, said that anything that causes London to fragment – like losing passporting – is “not just bad for the UK, it’s bad for Europe and the global financial system”.
This message doesn’t appear to have reached Whitehall. One ‘insider’ told the FT: "Of course we will end up out of the single market and customs union. It won’t be great but we will get the best possible deal.”
Separately, if you're looking for a route into financial services that doesn't involve multiple internships, impeccable academics and a focus on securing your first job from the moment you start university, Aberdeen Asset Management might be the place. Hugh Young, a managing director and head of Aberdeen's Singapore office, told the FT that the focus for recruitment at the fund manager is "trying to detect a bit of passion in people”. If you're motivated by money, go and work for Goldman Sachs, he says. “We want people to have lives, to try to work as a team.”
In truth, the Goldman Sachs comparison is a little unfair - Goldman does pay well, it does look for bright students, but it also wants to hire exciting people with unusual profiles.
Bu Aberdeen's approach might have something to do with the relatively laid back outlook of CEO Martin Gilbert, combined with Young - the 'brains' of Aberdeen - who says that he "fell" into the City and only ended up with a job at a stockbroker through a "personal introduction from the grandmother of a girlfriend". Such a route in is unlikely these days, he concedes, but this doesn't mean they're looking for a typical type.
“We try and be broad. One assumes people are bright and can learn. Apart from a very few jobs, the maths that one uses is not terribly complex — it’s more looking for a spark in people.”
Goldman Sachs is cutting 30% of its headcount in Asia. That is 90 investment bankers (Financial Times)
Sebastian Grigg, a vice-chairman of Credit Suisse's investment bank, is leaving to start his own advisory boutique called ESG Corporate Finance (Sky News)
HSBC has hired a headhunter to assess its current crop of executives and see if there are any gaps to fill. It wants to avoid a succession problem for its CEO (Financial Times)
“The fact is that universities want as many bums on seats as possible but they need to think about destinations for jobs. If someone has completed a first degree in sociology and six months later they are working as a barista in a coffee shop, that is an issue both for them and the economy.” (Financial Times)
Korea’s financial sector is shrinking, so bankers are going back to school (Bloomberg)
Financial sector jobs in London have fallen by more than 13% over July and August. Blame Brexit (Financial News)
Six things you must do before asking for a promotion in investment banking (Financial News)
Commerzbank is planning to cut 5,000 jobs, largely in the back office (WSJ)
“I don’t know if we are looking to be less intense. We can certainly be more flexible. I think we need to wrestle with that more.” KKR is aiming to be more family friendly. This includes flying nannies out on business trips (WSJ)
Jerome Kerviel ‘only’ has to pay SocGen €1m, instead of paying back all of the €4.9bn of losses he amassed at the bank. He thinks he should pay nothing (BBC)
Dublin has had “a lot” of enquiries from financial services firms since Brexit, says its finance minister (Bloomberg)
38% of private equity professionals responding to a survey had Harvard MBAs. But the course does little to prepare them for the world of PE. (Financial Times)
Mark Fedorcik is the new head of Deutsche Bank’s corporate and investment bank in the U.S. He was previously head of DCM, one of Deutsche’s best divisions in the region. Paul Stefanick has moved up to chairman (WSJ)
Magic Circle law firm Clifford Chance has slashed its trainee intake by 25% (Roll On Friday)
Cash equities traders are the biggest bonus losers – pay could drop by 15% this year. Technologists will be receiving a 5% raise, however (WSJ)
Jim O’Neill, the former chairman of Goldman Sachs Asset Management who’s been working as a UK treasury minister since May last year, has quit. He doesn’t feel as “plugged in or as valued as before”.
Credit Suisse is cutting jobs in the U.S. Guy Cirillo, global head of business development for electronic trading products, has gone. (Business Insider)
Time to take an investment banking job in Seattle, Denver or Atlanta (Business Insider)