Regulators fleeing as they join bankers in grievances over pay
For months now, banks have been complaining both publicly and privately about how mandates on pay have caused undue turnover. Now, in a bit of irony, regulators that oversee big banks and have contributed to much of their perceived hardships are doing the same thing.
A new U.K. report has warned of massive staff turnover at two the country’s financial regulators, and said that more needs to be done to attract and retain top staffers. In 2013, staff turnover at the Financial Conduct Authority was nearly 10%. At the Prudential Regulation Authority, that number reached nearly 12%, with more than one-quarter of those who resigned deemed “high-performers,” according to the National Audit Office. More than one-third of FCA employees have fewer than two years of experience at the firm or its predecessor.
The report comes just weeks after the U.S. Commodity Futures Trading Commission blasted the Obama administration for its upcoming budget, which would provide the regulator with a maximum of $280 million, but likely less. “Our staff is on its knees, some reaching for the exit doors and others already having bailed,” CFTC Commissioner Bart Chilton said at the time.
If regulators are looking for someone to commiserate with, they don’t need to look too far. Several banks, particular those in the EU, have griped about losing their best talent due to pay constraints. Things are so bad at Barclays, the firm gave out bonus increases to U.S. investment bankers despite layoffs and poor overall results. Barclays said the number of resignations of senior staff in the U.S. doubled in 2013.
The bank felt it had no choice. Now, Barclays’ shareholders are being urged to vote against the re-election of the bank’s compensation committee chairman. They may even look to dial back previously announced pay packages.
While anecdotal evidence will tell you that the recruiting efforts of big banks haven’t fully materialized yet, new research suggests that the next crop of business graduates may have more interest in Wall Street.
Hedge fund professionals and recruiters never cite shorter hours than banking as a selling point for making the switch to the buy-side, but the culture means that you’re unlikely to be chained to your desk for the sake of it.
Five banks failed the Federal Reserve’s stress test, including Citigroup and the U.S. units of RBC and HSBC. Goldman Sachs and Bank of America passed after reducing plans to pay dividends and buyback shares.
Traders who thought they were buying up shares of Oculus VR, the privately-held virtual reality company recently purchased by Facebook, actually bought stock in two other completely unrelated public companies, sending share prices up over 100%. Similar mistakes were made with Twitter/Tweeter and Nestor/Nest Labs.
Glassdoor’s list of the 50 highest rated CEOs came out this week. It contained just one Wall Street boss: Goldman Sachs Chief Executive Lloyd Blankfein. J.P. Morgan CEO Jamie Dimon made last year’s list but came up short in 2014.
A FINRA arbitrator who heard more than 40 securities cases has been booted after it became evident that he lied about being a lawyer. His excuse is amazing. “Frank claims that he was a `lawyer’ – putting the word in quotes – and that the California bar must have lost his records.” It appears he wasn’t a lawyer – with or without quotes – but was actually impersonating an attorney who shares his name.
UBS has suspended at least four more traders in the U.S., Singapore and Switzerland as it continues its foreign exchange manipulation probe. Onur Sert in the New York is reportedly one of those who was benched.
Buzz Around the Office
North Korean men are now legally obligated to get the same haircut as Kim Jong Un. Previously, they could pick from 10 state-approved hairstyles.
Quote of the Day: ““In the year that shareholders had to put in 5.8 billion pounds by way of rights issue, most of that has left the bank in bonuses.” – the U.K.’s Local Authority and Pension Fund Forum on Barclays’ bonuses