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Wall Street’s middle office flexes its muscles

On Wall Street, middle and back office staffers don’t garner near as much respect as front office revenue generators. At least they didn’t used to.

With the recent influx of regulations and the growing need for banks to become more risk-averse, middle and back office employees have earned seats at the big table, with the salaries to match. In compliance, full-time employees and even contractors are taking home north of $200,000 a year, with opportunities on both the buy and sell-side.

The landscape is similar in risk, where banks are investing heavily with hope of keeping their names out of the headlines. The annual budget for Wells Fargo’s risk department has doubled to $500 million over the last two years, for example, with its staff increasing from 1,700 to 2,300 during the same period, according to the Wall Street Journal.

The OCC told the paper that salaries for senior risk officers have increased a massive 40% in the just the last few years as banks are competing harder for talent. And it’s not just money. Risk officers, who were seen more as a nuisance to even their own superiors, are now commanding a bit more respect, at least according to the Journal. Goldman Sachs’ chief risk officer was recently elected to its ever-powerful management committee – a first in the company’s long history.

However, while management may see risk officers as equals – or at least critical to the business – the risk takers and revenue generators may not have come around just yet.

Risk officers are still often viewed as the enemy by colleagues who are desperate to get a transaction approved, said one market expert. Not to mention the regulators, who are always breathing down their throat, he added. But hey, at least the paychecks are bigger than they used to be.

Tips for the Perfect Resume (eFinancialCareers)

We reached out to a former recruiter and certified professional resume writer for a refresher course on the most commonly asked questions about resumes.

Standard Chartered Warns of Poor Half (WSJ)

Standard Chartered is the latest bank to warn investors of dwindling profits. Poor foreign exchange and interest-rate trading revenue has led to a 20% dip in first half operating profit.

BNJ Doesn’t Have the Same Ring To It (NY Post)

BNY Mellon is moving, but not as far as some had once thought. The firm’s new headquarters will be located at Brookfield Place in downtown Manhattan. The bank was reportedly considering New Jersey as well.

Hedge Funds Break Record (WSJ)

Roughly $93 billion in new capital has flowed into hedge funds this year, the most since 2007. The industry just exceeded the $3 trillion barrier for the first time ever.

Pay May Not Be as Good (Bloomberg)

39-year-old Nelson Saiers is resigning as chief investment officer of New York-based Saiers Capital. He’s becoming a full-time artist. Good for him.

Barclays Sued (NY Times)

The state of New York is having a field day with foreign banks. The latest to feel the wrath of authorities is Barclays, which is now being sued for allegedly lying about the activity that goes on in its dark trading pool.

Back-to-Back Busts (Bloomberg)

Interest rate traders are expected to earn 20% less in 2014 than they did a year ago. As a reminder, 2013 was a rotten year in its own right.

Buzz Around the Office

No Skin Alert (Gawker)

The BBC was forced to apologize after sending out a breaking news alert that there was no nudity in the latest episode of Game of Thrones.

Quote of the Day: “The structure of pay and bonuses contributed to the financial crisis.” – RBS Chairman Philip Hampton


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AUTHORBeecher Tuttle US Editor

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