After cutting loose 10,000 jobs, UBS Chairman Axel Weber and his C-level brethren issued a sobering warning to those outside of UBS, telling a German paper that eventually other firms will need to follow suit.
"I suspect that many banks have not yet really understood what the consequences of the new capital rules for business will be when they come into full effect in 2019," Weber told the paper. "We, on the other hand, see this new world very clearly.”
Weber’s comments are accurate in a sense, as new cap requirements will surely limit how aggressive firms can be with their investment banking units, but UBS is also in a unique situation. Unlike competitors like Barclays and Deutsche Bank, which experienced strong i-banking growth in the third quarter, UBS reported a net loss of more than $2.3 billion, dragged down by its investment banking business.
As a Swiss bank, UBS must abide by stricter cap rules than other large firms, giving it more incentive to walk away from its fixed-income business. Basel III orders will ruffle some feathers, but it’s difficult to imagine another big bank cutting bait like UBS.
Back in Hot Water (The Hill)
Federal regulators are seeking to impose a record $435 million fine on Barclays for manipulating U.S. electricity markets. The U.K. bank denied the allegations and said it will “vigorously defend” itself.
Optimism Gaining (Washington Post)
The private sector added 158,000 jobs in October. The news comes a week after initial jobless applications fell by 9,000 to a seasonally adjusted 363,000.
Sandy’s Stain (eFinancialCareers)
The markets may be back open, but business is far from usual on Wall Street. Big firms like AIG and Morgan Stanley appear nowhere near returning to their downtown offices due to significant flooding.
FA Reigns Supreme (CNNMoney)
CNNMoney just published its “Top 10 Best Jobs in America” list, based on growth potential, pay and work/life balance. Coming in at number seven is a financial advisor, the only finance role to make the list.
London Calling (Reuters)
London experienced a 10% jump in finance-related job openings in October, with smaller investment banks and brokerage houses doing most of the recruiting.
UBS Not Done? (Financial News)
UBS is reportedly considering shuttering its sovereign, supranational and agency (SSA) bond business, putting the jobs of many high-ranking UBS employees at stake. In other news, Croda International, a 40-year client of UBS with a $3 billion market cap, has ended its brokerage relationship with the firm, reportedly due to the exodus of several veteran UBS bankers.
Buzz Around the Office
Define Irony (MSN)
A man prays at the foot of a giant crucifix that his wife would be cured of cancer. She beats the disease. But then, in an attempt to clean the crucifix, the marble fixture falls on the man, devastating his right leg. He has since sued the church for $3 million in damages.
List of the Day: Bond Lessons
In celebration of the James Bond franchise’s 50-year anniversary, here a few workplace lessons that can be learned from the fabled spy.
- Always dress for success, even during a crisis.
- People (read: co-workers) aren’t always who they seem.
- Never go down without a fight. People will respect you, even if it doesn’t work out.
(Source: The Daily Muse)