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Morning Coffee: 2017 could be good for investment banks, but for a bad reason. The problem with Deutsche Bank’s hiring freeze

2017 could provide a respite for traders in investment banks’ fixed income currencies and commodities divisions and, more pressingly, those in down-trodden equities teams.

FICC revenues are likely increase by 10% in 2017, after years of revenue declines, and by equities by 6%, according to Barclays analysts featured in Financial News.

But while this is good news for volumes in investment banks, it’s not exactly great for the world at large. Barclays’ analysts cite the “politics of rage” as one of the reasons for the increase – think Brexit, Trump and a host of elections across Europe in 2017.

"Trading and hedging have been boosted by the return of rates and the politics of rage, with associated swings in the outlook for inflation, growth, and fiscal balances around the world,” they wrote.

Separately, Peter Hazlewood, the head of Deutsche Bank’s financial crime fighting unit – and surely one of the busiest men in the whole organisation – has quit after just six months in the job.

Deutsche Bank has a hiring freeze on – except for critical hires in areas like compliance – but even here it there’s a limit.

Hazlewood wanted to hire more than 600 people to bulk up its financial crimes division, according to the WSJ. Senior management approved 400 new recruits – which would bring the total employed in the division to 1,160 – and this supposedly created some tensions.

Still, the Journal also reports that some senior executives at Deutsche – including chief regulatory officer Sylvie Matherat – were not happy with elements of his management style.


Hedge funds want to hire compliance staff from investment banks (Financial News)

Meet the UK’s new Brexit negotiator (Bloomberg)

Regulatory lawyer Jay Clayton will run the SEC (Bloomberg)

Hedge funds are more about risk aversion these days (WSJ)

Credit Suisse has attempted to block the recruitment of eight senior bankers by Jefferies (Reuters)

The former head of emerging markets FX trading at Barclays admitted price fixing (Bloomberg)

“People in the City tend to be driven and part of drive comes from the need to achieve in order to feel OK. That’s usually to do with an underlying anxiety” (Financial News)

Robey Warshaw has 15 employees, and made £43.4m ($53m) (Reuters)

Can Blockchain deliver in 2017? (Financial News)

Goldman thinks there’s little chance of a soft Brexit (Business Insider)

Forget the January detox – these are best places for power lunches in London (Politico)

Maybe banks’ tactics of promoting top performers works – if employees think their boss can do their job, they’re happier (HBR)


Photo: Getty Images

AUTHORPaul Clarke

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