Morning Coffee: Goldman Sachs employees obliged to play nice with each other. The market crushed these bankers

Perhaps the most scarring result of the 2008 economic collapse for Goldman Sachs was all the talk about how the bank, at times, didn’t seem to always have its customers’ best interest in mind. All that chatter, including the infamous book penned by former Goldman executive Greg Smith, came to a head in 2010 when lawmakers accused the bank of betting against its clients during the mortgage crisis. Fast-forward eight years and Goldman has won back the confidence of many clients, but apparently not enough for new CEO David Solomon.

Two weeks into the job, Solomon has spent nearly the entire time on the road, first attending a women’s summit in California and now wooing big clients across the country with a new pitch: a concierge service where the bank’s main divisions will work in concert with each other to provide better service to customers that have multiple needs, according to Bloomberg. Solomon reportedly sent a memo to employees on Oct. 1 – his first day on the job – in which he laid out the plan, calling for an “integrated approach” where employees build “One Goldman Sachs.”

While details are still relatively sparse, the plan appears to be more than just a pump-up speech from the new boss. Solomon has charged the company’s president, John Waldron, with supervising the initiative. Other senior leaders including U.S. equity sales chief Jack Sebastian and Sheila Patel, co-head of the firm’s international asset-management operations, are also spearheading the change in strategy.

“Many of our clients are becoming broader and more complex as they build out their businesses,” Waldron told Bloomberg. “Our response to them has to be much better.”

How the plan changes the day-to-day work for employees will be interesting to see. Will traders be taking regular meetings with M&A bankers who work with the same corporate client? Will Goldman create cross-market teams that solely see to the needs of one or two large clients? Either way, you can bet that bankers and traders are going to have to expand their bubble in some way.

Elsewhere, the recent stock market plunge has been particularly crippling for Morgan Stanley and Goldman Sachs bankers who put up big numbers in years past. Share prices for both banks hit 52-week lows on Thursday. Based on Morgan Stanley’s typical three-year vesting schedule, bankers who received their 2016 bonuses in restricted shares have suffered $500 million in paper losses since the stock’s 2018 peak. At Goldman, bankers who received restricted shares with a five-year vesting period as part of their 2014 bonus have lost a collective $1 billion since March. Neither group can unload the stock until January 2019, according to Crain’s.

Meanwhile:

Automation has replaced bank employees in nearly every division over the past few years. But investment bankers are safe, right? Not according to one Harvard professor, who estimates banks will be able to cut 30% of their investment banking staff due to the influx of new technologies. (Bloomberg)

J.P. Morgan, Citi and Wells Fargo report third quarter earnings today. One analyst expects much of the same from the previous quarter, though with “a little bit of a lack of dessert” – or improved margins. (Yahoo Finance)

Goldman Sachs partner Dina Powell is reportedly leaning against rejoining the Trump administration as ambassador to the United Nations. Trump is said to have called Powell twice about the job, the first of which came before current ambassador Nikki Haley announced her resignation. (Bloomberg)

Deutsche Bank has promoted 20-year veteran Tiina Lee to chief executive of its U.K. and Ireland business. Lee will take over for investment banking boss Garth Ritchie, who will retain his other responsibilities. (Financial News)

HSBC is continuing to make changes following the “mutiny memo” written by former and current investment bankers questioning the group’s leadership. Longtime J.P. Morgan exec Greg Guyett is set to become the firm’s new co-head of global banking alongside Robin Phillips, who was singled out in the memo. (Sky News)

Goldman Sachs is planning to open a new U.K. office space in Milton Keynes to house call center employees for its digital consumer bank, Marcus. The firm plans to add around 150 more employees before it opens its new digs. (Financial News)

U.K. banks are at risk of mass credit downgrades if Britain leaves the EU is a “disorderly” manner, according to rating agency Standard & Poor’s. (FT)

Kanye West met with President Trump on Thursday. The highlight may be the fact that the rapper’s iPhone password is apparently 000000. (Twitter)

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