Morning Coffee: Barclays confirms it – bargain bankers are all the rage. Morgan Stanley’s employee loans

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This is not a good time to be part of Barclays premier league. As the bank automates processes and cuts costs, burdensome senior staff are being jettisoned in favour of moderately expensive mid-rankers.

Antony Jenkins, chief executive of Barclays, said yesterday that the UK-based bank will have fewer premier people in future. “We will ultimately have less very highly paid people within the organization,” Jenkins, declared. “That’s in line with the strategy.”

Barclays’ strategy is to become more ‘focused.’ It’s also to get rid of 7,000 investment banking employees by 2016, with managing directors and directors bearing the brunt of the cuts. Barclays’ junior investment banking staff have been simultaneously endowed with new powers to identify senior bankers who mismanage them or heap work upon them inappropriately. (Barclays’ juniors seem to be leaving nonetheless, but this appears to be entirely of their own accord).

Barclays' plan to cut high earners comes after the number of people earning £1m+ at the bank increased from 473 in 2012 to 481 in 2013. Earlier this year, Barclays' then-chairman David Walker said they'd had to pay important staff who were threatening to leave the bank, especially in the U.S. fixed income trading business. Now, it seems that Barclays is happy to lose all those demanding people anyway. When it comes to pay, this is a good time to be in the sub-£500k category.

Separately, Morgan Stanley’s 10Q regulatory document reveals that the U.S. bank has made some generous loans to its own staff. At the end of September, Morgan Stanley had $5bn of loans to its employees outstanding. It was also owed another $41m by staff who took out loans ‘in conjunction with certain after-tax leveraged investment arrangements.’  The bank said the first set of loans were made to, ‘recruit and retain certain employees’. There was no elaboration on the second set of loans, but they sound a lot like they were made to senior investment bankers who were offered an opportunity to invest in Morgan Stanley’s own funds. - Salaries and bonuses aren't the only ways in which banks compensate senior employees.


Bank of America revised down its Q3 earnings to take account of an impending $400m settlement related to FX fixing. Instead of a small profit, it now made a $232m loss for the quarter. (Financial Times) 

Barclays is hiring in Asia, especially in Indonesia and for Chinese capital markets. This follows a, ‘very, very big restructuring’ in the Asian investment bank. (Bloomberg) 

Jobs are being cut in investment banking, but they’re being added in banking technology. (Euromoney) 

SocGen has got 800 people working on its, ‘supervisory risk assessment.’ (SocieteGenerale) 

Equities revenues fell more than 25% year-on-year at SocGen in the third quarter. The bank blamed low volatility and low volumes. (Financial News) 

Commerzbank had a good third quarter in equities and commodities. Things didn’t go so well elsewhere in fixed income. (Financial Times) 

It's been a good time to work in leveraged loans. (Twitter)  

Post-Bill Gross, Pimco has cut its fees (again). (Alphaville) 

If you’re moving to a hedge fund, making it one that invests in credit products. (Bloomberg) 

One particular hedge fund had a very good October. (FinAlternatives)  

JPMorgan whistleblower says the bank was criminally negligent with regards to pre-crisis mortgages. (RollingStone)   

Far fewer Wharton MBAs are going into finance. This is a shame as finance jobs are still the best paying. (Poetsandquants) 

Alida Haisma, a former call-centre worker, now makes a living by trading on eToro, the largest “copy trading” site. (Financial Times)

75% of people who work in the City of London are fearful of a terrorist attack. (Evening Standard) 

You're 20X more likely to get a prestigious job if your father was in a 'higher professional' or managerial career. (Guardian) 

Why it’s generally a good idea to be slightly underpaid. (Inc)  

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