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Morning Coffee: Why you waste your 20s working 70+ hour weeks in banking - or not. A feud breaks out at Citi

Brutally-long working hours may not be the chief reason many junior bankers burnout, even if that’s their own belief. Rather, it’s the intensity of the work that takes more of a physical and mental toll, according to a new study.

Researchers from Cass Business School and ESCP Europe found that work intensity – tight deadlines and a relentless pace – are a bigger predictor of negative health and career-related outcomes than long working hours. The study suggests that banks’ recent efforts to cap working hours and limit weekends spent in the office may be counterproductive, as the measures make for more prolonged work intensity – a marathon that is run at full speed. The benefits of a slightly shorter week are undone by constant pressure to produce at a fast pace, according to the study.

After three years of overwork, a human body begins to “take revenge” on itself, beginning with physical signs of anxiety – fingernail biting and insomnia – and then graduating to bigger health concerns. What’s more, the researchers found that work intensity – not hours – led to worse career prospects, including missing out on promotions. The problem is that time spent at work is easy to quantify and value, blinding some managers of which employees are really facing levels of stress that are unhealthy and counterproductive.

This can be particularly true in banking culture, where long hours are often looked at as badge of honor. Some juniors and interns have acknowledged wasting time at their desk with no real work to do while waiting for their boss to leave for the night. Others may work the same number of hours but are putting their body through hell, likely with no one the wiser.

All that said, one expert believes the perceived importance of a proper work-life balance – for the success of the individual and the company – is nothing more than a false narrative created by those who can’t keep up. “These individuals aren't willing to or are unable to perform at those levels, so want to pull down others who can and will,” Marc Effron, author of “Work Smarter, Not Harder,” told the FT.

Elsewhere, we now know why Citi’s global head of cash trading suddenly exited the bank in March. Armando Diaz and his boss, Citi's global co-head of equities, Dan Keegan, didn’t agree on the strategy behind the bank’s central risk book (CRB) – an emerging cog in today’s sell-side trading operations that allow banks to increase liquidity while also hedging against risk, according to Business Insider. The axing of Diaz, who helped turn around Citi’s struggling cash trading business, shows the growing importance of central risk books now that dark pools have been squeezed by MiFID II. CRBs quietly hold plenty of influence at big banks.


HSBC may be suffering from a bit of bad timing. The bank’s adjusted costs for the first half are up 8% as it continues its expansion into Asia. An escalating trade war between the U.S. and countries like China isn’t helping. (Bloomberg)

Barclays is the latest bank to dip its toe into cryptocurrencies. The U.K. bank has created a “digital assets project” led by its global head of energy trading, Chris Tyrer, to explore possible crypto trading strategies. (Financial News)

What exactly is Gary Cohn up to? The former Goldman Sachs president and ex-economic advisor to the Trump administration is still looking for new opportunities but has spent around two-thirds of his time working on his golf game. The most interesting thing Cohn said during the interview is that he sees no merit behind Treasury Secretary Steven Mnuchin’s idea to cut taxes on capital gains. “It was an idea he came up with that got killed in 30 seconds or less, and it won’t last 30 seconds again,” Cohn said. (Bloomberg)

Of the big five U.S. tech companies – Apple, Amazon, Facebook, Google and Microsoft – Amazon’s interview process appears to be the easiest. Roughly 30% of candidates said the process was “easy” or “very easy.” Just 5% of Microsoft candidates said the same. (Business Insider)

U.K. chancellor Philip Hammond is privately urging financial services heads to develop “alternative pathways for growth” in anticipation of a possible loss of access to European markets post-Brexit. He believes the EU may bury London with red tape to the point that U.K. banks will need to look to emerging markets for revenue. (FT)

Bank of America is planning to move some of its London-based research analysts to Paris as part of its post-Brexit plans that could result in at least 200 new seats in the French capital. (FT)

A group of Wells Fargo employees from California won the $543 million Mega Millions jackpot last month. Meanwhile, the bank just admitted that a “calculation error” may have led to the foreclosure of 400 homes whose owners were wrongly denied a mortgage modification. (NY Post)

Brevan Howard plans to launch a new $750 million macro fund on Sept. 1. (Reuters)

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AUTHORBeecher Tuttle US Editor

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