LUNCHTIME LINKS: it should be possible to earn five times as much at a high frequency trading outfit as at Goldman Sachs
While banks are struggling against new regulations and substantially higher capital requirements, high frequency trading businesses continue to sail blithely below the regulatory radar. Add to this the fact that HF traders have the benefit of inherently low capital and staffing requirements, and the industry looks like a good place to be.
The most recently filed results for Getco Europe appear to confirm this. Financial News suggests that Getco's revenues per employee for 2009 were $7.4m, five times higher than at Goldman Sachs.
For a small operation, Getco has been doing some dramatic hiring recently. It doubled its European staff to 31 people in 2009 and has added another 9 since. According to the firm's website it's a 'team-oriented meritocracy' which is keen on 'mental flexibility, vigorous debate and respect.'
Getco's advantage may dwindle if threats to restrict high frequency trading come to fruition. The company is also being hit by falling equities volumes: pre-tax profits at Getco Europe slumped 49% in 2009.
It's also notable that, compared to the average investment bank, Getco doesn't share nearly as much of its revenues with its employees. In 2009 the compensation ratio was just 21% - lower, even, than HSBC. This still left Getco Europe with compensation per head of $1.5m.
Traders will earn less under new capital rules. (Wall Street Journal)
Former Goldman partner says banks are no longer viable and need radical restructuring. (Wall Street Journal)
George Osborne is keen on a FAT tax. (Telegraph)
The FSA is taking three times longer to approve financial businesses than before the crisis. (Financial Times)
The EU needs to consider that bonuses made up of underwater options will encourage even riskier behaviour. (Financial Times)
Senior UK bankers are lobbying international regulators in Washington for a global bonus standard. (Telegraph)
HSBC wants more room in Canary Wharf. (Evening Standard)
RBS will vacate 199 Bishopsgate by Christmas. (Sunday Times)
Morgan Stanley's new high-fiving recruitment video. (Wall Street Journal)
Graduates in top jobs to subsidise tuition fees. (The Times)
Millennials - generation whine. (Tech Crunch)
Blythe Masters started out as an 18 year old intern on JPMorgan's commodities desk. (Wall Street Journal)
The Guardian's article about bonus regulations driving bankers away has attracted 395 (unfriendly) comments. (Guardian)
Four questions YOU need to ask in an interview. (Wall Street Oasis)
Tom King explains why it could take years for BarCap to get anywhere in M&A. (Financial News)
A pessimist's guide to the next ten years. (Globe and Mail)
