Morning Coffee: The investment banking severance package. Juniors banks DON'T want to hire
How much will you be paid when you lose your inordinately well paid job in an investment bank and take indefinite leave on the sofa? A lot, but not enough to retire on.
Morgan Stanley's severance costs offer some indication of the packages on offer. Bloomberg reports that the US bank is making 1,200 people redundant in its purge of fixed income traders and says the bank has set aside $150m to cover its 'severance charge.'
If costs are incurred equally, the implication is that Morgan Stanley will be paying out severance packages of around $125k (£83k) per head.
Needless to say, this is unlikely to be the case. Of Morgan Stanley's 1,200 layoffs, 470 people are in sales and trading and 730 are in infrastructure and support. No prizes for guessing where the biggest packages will be paid...
Separately, investment banks have very minimal interest in hearing from newly minted MBAs who fancy a career in sales and trading. We know this thanks to a new report from Barclays Investment Bank, which included the chart below. It suggests the number of associate roles in sales and trading has fallen by 70% in the past five years.
Alistair Darling, ex-Chancellor of the British Exchequer, is off to become a director at Morgan Stanley. (BBC)
William Blair is prowling about, looking for new talent in London. (Financial News)
There's nothing wrong in participating in complex trades, says John Cryan. (AFR)
The badness of Jesse Litvak: 'He traded residential mortgage-backed securities, and he would tell buyers of those securities inventive little stories about the prices he had paid for them.' (BloombergView)
It's ok, Meredith Whitney is now running an $800m eight person fund in Bermuda. (Bloomberg)
Law firm bonuses will be flat too. (WSJ)
2,750 first time buyers in the UK saved up enough money to buy a home mortgage-free in the past year. (Financial Times)
Chinese bankers reprimanded for, 'hosting extravagant dinners and entertainment and forcing subordinates to give gifts.' (Financial Times)
Goldman Sachs had 600 traders in New York City making markets in US stocks in 2000. Now it has 10. (Business Insider)
If you go to a European business school, you’ll probably end up in consulting. (Bloomberg)