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Morning Coffee: JPMorgan, Goldman Sachs to relieve the pressure on stressed-out 19 year-olds. Sergio Ermotti's wild move

Spare a thought for the 18 or 19 year-old university student with an interest in working in an investment bank. Over years, the investment banking recruitment process has become incrementally more relentless. Once upon a time, it was possible to apply for an investment banking job early in the third year of university, before graduation. Not any more.

In the early 2000s, banks' graduate recruitment process changed. It suddenly became necessary to get a summer internship in your second year and to use the internship as a vehicle for gaining a job offer upon graduation. So far, so standard. But then, around 2014, it changed again. In Europe, banks began offering spring internships to first year university students. It then wasn't long before good first year students who completed these spring internships were offered second year internships and good students from second year internships were offered full-time places. - To maximize your chance of getting a banking job in London, it became necessary to get on the recruitment conveyor belt in the first term (or early second term) at university, when most students have barely settled in.

Something similar happened in the U.S, although it was more that second year summer internship applications opened earlier and earlier (and earlier). In March this year, Yale University's blog complained that students with an inclination towards banking were being made to apply for their second year internships in spring of their first year (sophomore year). “It really started in 2015, we saw the timeline for financial services moving towards the fall of junior year, and then last summer we saw it move to the summer before junior year, and now suddenly we’re seeing it in the spring,” said Jeanine Dames, head of Yale University's career services offices. In spring 2018, students were already being asked to apply for internships in summer 2019, with the result that they were effectively being tied into banking careers as early as possible. Dames suggested this might be one reason banks have such problems retaining their graduate recruits: students commit to banking careers without exploring the alternatives and then leave when they realize the industry is not for them.

Banks have taken note, at least in terms of summer internship timelines. There's no indication that the spring internship process is being scrapped, but the Wall Street Journal says Goldman Sachs and Morgan have both committed to stop chasing sophomores to apply for summer internships a whole 15 months early. From now, summer intern applications will go back to taking place early in the junior year in which the internships take place.

“We were contributing to an environment that pressured students to choose rather than to explore,” said Dane Holmes, Goldman’s top human-resources executive. “I want people who want to be at Goldman Sachs, not people who felt they had to say yes to an offer.” Matt Mitro, JPMorgan’s head of campus recruiting, said: “We found it was disruptive to students doing what they were supposed to do, which is study.”

Naturally, banks also have their own reasons for delaying the U.S. recruitment timeline. The Wall Street Journal notes that many of the students who came through the expedited process in the U.S. were, 'white men who had informal ties to finance through family or friends,' and who knew they had to get their acts together early on. As banks try to diversify and recruit more women and minority candidates, this didn't make a lot of sense.

Separately, Sergio Ermotti seems to feel pretty bullish about UBS. Reuters reports that the Swiss bank's chief executive just bought CHF13.1m ($13m) of UBS stock. This is pretty much an entire year's pay for Sergio, who as a former trader is clearly comfortable taking risks. UBS's stock has fallen 25% this year. The bank reported a 32% rise in third quarter net profit thanks to a strong quarter at its investment bank.


Goldman Sachs appointed George Lee, one of its top technology investment bankers, as co-CIO alongside Elisha Wiesel. Lee's job will be to alert Goldman to new technologies which could be a threat or an opportunity. (Recode)  

Garth Ritchie's Deutsche Bank pep talk: "The franchise has not been impaired..In important areas for our franchise, we have been gaining market share,” he said. “We’re competitive.” (Bloomberg) 

The U.K. plans to sell off its remaining stake in Royal Bank of Scotland by the end of the 2023-2024 tax year. (Bloomberg) 

In M&A, HSBC sits 37th on Dealogic’s numbers. For a bank that made great play of hiring rainmakers such as John Studzinski (2003 to 2006) and Matthew Westerman (2016 to 2017), from Morgan Stanley and Goldman respectively, this looks like a failure. (Financial Times) 

Women worry about me-too: "I’ve talked to men—well-meaning ones—who say they’re scared of being taken the wrong way by women, who don’t know how they should interact with female associates and colleagues. I’m afraid this will mean men will exclude us even more from relationship-building opportunities. If there’s a case that entails travel, they might think it’s safer to pick a male colleague than me.” ( 

More than one in nine, or 11.4%, of the FCA’s approximately 3,700 staff left in the 12 months to April 2018. This is not good ahead of Brexit. (Financial News) 

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AUTHORSarah Butcher Global Editor

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