Morning Coffee: JPMorgan bankers cash-in, Credit Suisse bankers can't. Sudden rush of finance job applicants
Where's the best place to work if you're a big spender and need at least £500k a year to live on? Try JPMorgan. The Wall Street Journal reports that senior staff at the U.S. bank sold around $17m of their holdings in the bank's stock in January. That compares to sales of less than $5m by insiders at Goldman and less than $1m by insiders at Morgan Stanley.
The big beneficiary at JPMorgan seems to have been Matt Zames, co-chief operating officer, who sold $4.2m of shares. The Wall Street Journal suggested that he and other JPMorgan staff were taking advantage of the 30% increase in the firm's share price since the start of 2013. "These people have expensive lifestyles," Eric Hosken, a partner at pay-consulting firm Compensation Advisory Partners, observed. "They need to get some liquidity out of that stock."
Senior Credit Suisse (CS) bankers may also want some liquidity from their deferred bonuses. Unfortunately, it may not be forthcoming. Sky News reported yesterday that the Swiss bank is having some regulatory issues with its PAF 2 deferred bonus scheme. PAF 2 dates back to the 2012 bonus round, when it comprised 35% of the bonus pool for senior Credit Suisse staff. At that time, the bank said the awards would be paid in four years' time, but reserved the right to defer payment for nine years if necessary. Due to regulatory problems with a capital relief mechanism built into PAF 2, that nine year deferral is now being implemented. Under PAF 2, senior Credit Suisse bankers will therefore need to wait until 2021 to get paid for 2012.
Fearful of its bankers' ire, the good news is that Credit Suisse is offering an alternative. Senior staff can swap their PAF 2 holdings into a new 'Capital Opportunity Facility' and still cash out in 2016 if they want to. The bad news is that this too is still subject to regulatory approval.
Separately, there's been a rush of financial services candidates onto the London market. Recruitment firm Morgan McKinley estimates that there were 8,328 people looking for 7,623 (precisely) jobs in London in January. That's nearly double the number of people looking for jobs in December and 65% more than the number of people looking for jobs in January 2013.
“A good chunk of spot traders, maybe 30 percent to 40 percent of them are at high risk of electronification eating their lunch.” (Bloomberg)
Banks are tightening the rules around FX traders’ personal trades. (Financial Times)
Investment banking is a global industry and pay rates are set in New York. (Financial Times)
Study by ex-Goldman trader unearths the obvious: when traders are under chronic stress, they take less risk. (Telegraph)
Morgan Stanley’s got a new head of MENA investment banking. (Bloomberg)
Goldman's got new co-heads of investment banking in Russia. (Reuters)
As recently as two years ago, the investment banking division of Royal Bank of Scotland was making more money dealing in risky mortgage-backed products in the US than anything else. (Financial News)
the thing about banking is, if you make it through the first two years, you can make a career out of it. (DealBook)
Journalist infiltrates the silly secret society for Wall Street’s elite. (NYMag)
High status people sit on desks that are close to the light. (Financial Times)