Morning Coffee: Middle aged bankers forced to learn languages other than English. Deutsche Bank's $60m algo issue

Teaching English as a Foreign Language (TEFL), is big business; in the UK alone the sector is estimated to be worth over £1.2bn ($1.5bn).  Some of that spending is the result of non-native English speakers who want to work in the banking sector: proficiency in English is a prerequisite for most finance jobs in the City and on Wall Street. Now, however, Brexit threatens to change the mix. - As banks shunt staff out of London and into locations still in the European Union, some bankers who had settled into speaking English may have to go back to school.

The Financial News has found one of them. An Italian banker tells the paper that he learned English especially to come to London, but that he is now being transplanted to Paris and compelled to learn French instead. He's not alone: Standard Chartered is reportedly offering German lessons as part of its relocation packages for the senior bankers it's sending to Frankfurt. Post-Brexit, it seems likely that all banks which laid on English lessons for staff will be reeducating them in new tongues. This could prove a challenge, particularly alongside a demanding day job. Evidence suggests that it's far less easy to learn a new language beyond early adulthood, and those middle-aged European bankers who picked up English whilst at university could find it much harder learning German after work. Notoriously monolingual British bankers could find it harder still.

Of course, not everyone will need to flex their linguistic muscles. Even as Brexit approaches - in whatever its form - Morgan Stanley is still advertising jobs in London for bankers to cover German and Spain and Barclays is looking for a London-based equity capital markets (ECM) banker to cover Southern Europe. However, Financial News says that debt capital markets (DCM) bankers are being given the nudge and that bond originators and salespeople from BNP Paribas, Credit Agricole, Credit Suisse, Standard Chartered, MUFG and Mizuho have been told to pack their bags. They might want to pack grammar books and dictionaries too.

Separately, after all the warnings about Central Risk Desks, Deutsche Bank has vindicated those pointing out their dangers. Bloomberg reports that DB's U.S. central risk desk lost $60m this year. The bank isn't commenting, but the loss seems to be something to do with technology issues, malfunctioning algorithms and the sheer volume of trades the desk was dealing with. - After a deliberate effort to hedge risks centrally, Deutsche insiders say the U.S. desk was dealing with up to $2bn in trades and that this was too much for it.

Meanwhile:

Prospective British chancellor of the Exchequer told assembled bankers he's a socialist” and that Marx had provided some “of the best analysis of how capitalism works.” (Financial News) 

Abu Dhabi sovereign wealth fund the International Petroleum Investment Company has accused Goldman Sachs of playing a “central role” in the 1MDB corruption scandal. "Goldman Sachs conspired with others to bribe IPIC’s and Aabar’s former executives.” (WSJ)  

Goldman Sachs Group stock has fallen below book value for the first time in more than two years and ranks as the worst-performing stock in the Dow Jones Industrial Average so far this year. (Financial News) 

The five biggest Wall Street firms have committed to lending at least $3.5 billion each to GE, the industrial giant which is facing concerns about the sustainability of its debt. (Bloomberg) 

ABN Amro has applied for UK licences to set up a new London-based unit of its clearing business after Brexit. (Financial Times)  

Exane BNP Paribas has been "aggressively expanding." Its recruitment budget has increased 70% since 2010 as it adds equity researchers and equity capital markets bankers. “We see Mifid II as the best chance since the financial crisis to pick up the very best market participants and bring them into our franchise." (Financial News) 

Blockchain developers are now experiencing fierce demand and can expect to earn up to $158,000 in the U.S. (BBC)

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