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The Losers of 2009

Although the year ended on a hopeful note for many financial professionals and companies, 2009 hardly brought unmixed cheer to the industry. Some key players couldn't fully cut loose from the fading credit crunch and government bailouts. Others suffered reputational damage which they must now struggle to prevent from impacting their top and bottom lines.

Here is our annual listing of people and groups that we believe lost the most ground this past year.

Lloyd Blankfein

I'm well aware that on the scale of CEO Maalox moments, answering a faux-intellectual's Spiro Agnew-like taunt about an obscure sea creature is far less significant than having to publicly deny you got stoned in the bathroom at a bridge tournament. Yet as much as I admire Goldman Sachs, it's getting harder to stomach the disconnect between the bank's financial performance and the unrelenting bashing it's taking in the media. Just as with credit spreads, a firm's image can deteriorate to the point where perception overwrites facts - fundamentally altering the reality on the ground. While we doubt the write-down of Goldman's reputational assets will materially damage its business or the career prospects of its work force, the risk is there. And it's the CEO's responsibility.

The City of London

Surprisingly, UK investment banks and bankers overtook Wall Street as the world's favorite scapegoat for vote-hungry politicians. Result: A 50 percent tax on banks' year-end bonus payments that's attracting copycats in European capitals, and an RBS holiday party where spending was restricted to "two pints of lager and a packet of potato chips" per employee.

Bank Support Staff

While career prospects and compensation in many sectors of banking and finance gradually emerged from the crisis over the course of 2009, IT and other back-office workers in finance seem caught in the middle. Although these supporting players never got big bonuses to begin with, anti-bonus hysteria among the broad public tends to lump them in with their better-paid front-office counterparts. Worse, the recession intensified a decade-long trend toward offshoring back-office jobs. And worst of all: Some authorities predict the incipient economic recovery won't reverse the decline in opportunities for IT and other back-office staff, but will only intensify managements' push to shift such jobs from the U.S. and other industrial countries to "low-cost/high skill regions."

American International Group

The only broad-based financial services company still under the authority of U.S. government compensation czar Kenneth Feinberg, AIG was repeatedly pilloried in the press throughout 2009, lost one chief executive and came close to losing another. In February and March, a "scandal" over retention payments that Treasury actually had approved many months earlier brought death threats against AIG employees and protest marchers to the homes of a few whose names showed up in the media. Remaining senior-level employees face continued public harassment over their right to receive further scheduled pay installments provided by their retention contracts. The government still owns 80 percent of AIG, so skirmishing over compensation will continue. One ray of hope for some remaining workers is that their particular AIG business units might fortify their capital position through an initial public offering or sale to a new, financially stronger corporate parent.


Although Citigroup managed (just barely) to raise enough equity capital in December to satisfy Treasury Department conditions for repaying its TARP bailout aid, it remains under the shadow of Big Brother more than any other major U.S.-based bank. (If you include non-U.S.-based banks, then Royal Bank of Scotland owns this dubious distinction.) The governnment had to push back plans to divest its 34 percent stake in Citi (that's 7.7 billion shares!) after the bank's December equity offering went so badly that the price of its shares sank below what it cost Treasury to obtain them through a multi-stage bailout during 2008 and early 2009.


Investors in the United Arab Emirates financial and trade hub dodged a bullet when after two weeks of nail-biting uncertainty, sister emirate Abu Dhabi belatedly stepped up with a $10 billion bailout to avert a threatened debt default by state-controlled conglomerate Dubai World. Still, Dubai's handling of the incident exposed weaknesses not only in economic fundamentals, but more important, in the integrity of its court system and business culture. If the damage to Dubai's reputation slows its recovery from the crisis, job opportunities for bankers there will be slow to recover too.

The mob

That's "mob" with a small "m" - the mass of the population, what is politely called the "polity" or "citizenry," and less politely, the "great unwashed" or the "crowd" (as used in Kierkegaard's dictum, "The crowd is untruth.")

As the crisis fades, it is increasingly clear that the loudest and least-educated voices failed to carry the day on banking re-regulation and taxation. Financial institutions and careers in finance will continue, and will remain within the private sector by and large. In this sense, every professional and non-professional who works or hopes to work in financial services came out a winner in 2009. Conversely, Rolling Stone insult-meister Matt Taibbi and his ilk lost in the end, notwithstanding 20 pounds of headlines stapled to their chests.

AUTHORJon Jacobs Insider Comment
  • ky
    8 January 2010

    the middle class is losing jobs and one of the most obvious culprits in the financial meltdown was the head of Countrywide Mortgage (Mr. Marsullo) who admitted at Mr.Waxman's Congressional Hearings on compensation that he was aware of fraud at Country Wide regarding subprime mortgages (Sarbanes-Oxley) he walked off with $162 million bonus if thatb was us we would be still sitting in jail

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