Big banks lose top talent on Wall Street

[Lucky Luciano]

MSNBC

http://www.msnbc.msn.com/id/30171267/

The turning point for Stephan Jung came in February, around the time bonus checks were slashed. A veteran of UBS, one of many banks tarnished by the financial crisis, Mr. Jung realized that the old Wall Street would not be bouncing back any time soon. It was time to head for the new.

“After 10 years, I did not see a future for myself,” said Mr. Jung, 42, who quit to parlay his sales expertise into a career at Aladdin Capital, a small but rising investment firm run by others who had also left some of the most venerable names in finance.

There is an air of exodus on Wall Street — and not just among those being fired. As Washington cracks down on compensation and tightens regulation of banks, a brain drain is occurring at some of the biggest ones. They are some of the same banks blamed for setting off the worst downturn since the Depression.

Top bankers have been leaving Goldman Sachs, Morgan Stanley, Citigroup and others in rising numbers to join banks that do not face tighter regulation, including foreign banks, or start-up companies eager to build themselves into tomorrow’s financial powerhouses. Others are leaving because of culture clashes at merging companies, like Bank of America and Merrill Lynch, and still others are simply retiring early.

This is certainly a concern for the banks losing top talent. But other financial experts believe it is the beginning of a broader and necessary reshaping of Wall Street, too long dominated by a handful of major players that helped to fuel the financial crisis. The country may be better off if the banking industry is less concentrated, they say.

“If the risk-taking spreads out to these smaller institutions, it is no longer a systemic threat,” said Matthew Richardson, professor of finance at the Stern School of Business at New York University. “And innovation is spreading out too. This is a good thing.”

--SNIP--

[rwheeler31]

1. Will we ever get rid of the greed?

[Arctic Dave]

2. Losing talent? If your team comes in last place and you get rid of the starters

can you really say you lost talent?

[Lucky Luciano]

4. Remember that less than 1% of the bankers caused this

crisis. Many others were actually bringing in a ton of revenue.

[Arctic Dave]

10. If this the case then, why are they in trouble.

Why isn't the other 99% bringing in tons of revenue still? If they are that talented, shouldn't they still be raking it in?

[Lucky Luciano]

11. Because, unfortunately that small minority ran a very very big book

The guys in equities, FX, commodities, all the middle office, and backoffice people did not have much to do with CDOs based on mortgage backed securities.

For example, take an institutional equities broker who can bring in $20-$30MM per year in commissions for the bank with his relationship. That broker, if he/she works at a TARP bank can now not get any of that, but if he/she goes to a smaller boutique, they can bring in about half of that revenue (The full amount might be harder because the smaller place will not be able to put up as much capital to complete trades for the best clients that then gets worked out of by the trader the broker works with). So, if they bring in $10-$15MM of revenue at a smaller boutique, don't be surprised if their takehome is about 1/3 of that - Anybody would jump ship under those circumstances.

[metapunditedgy]

14. Then why not expose the supposed 1% of gamblers

who ruined things for everyone? If they truly f'ed up the entire system while the other 99% suffer for it, why don't those 99% point them out and tell them publicly to go to hell. The perpetrators are found, perhaps punished, and the rest of Wall Street can get its reputation back.

Bottom line, I just don't believe that the fraud and gambling was confined to a few people.

[Arctic Dave]

28. So if the other 99% bring a small amount of revenue, shouldn't the bonuses reflect that.

Also, when I work for a large corporation, our bonuses were based on the whole of the company doing well. The reason was that the health of the business unit came first. As a matter of fact it is happening right now. Even though this business unit is doing quite well (tens of millions of contracts have been awarded) budgets are being slashed and bonuses are being cut. Why is this, because these units are having to compensate for other units that are struggling right now.

If these people feel they can find a better deal somewhere else, I don't think we should interfere with their prospects.

[Hannah Bell]

16. "a ton of revenue" - doing what, exactly?

answer: the same kind of thing.

[mbperrin]

25. Exactly, the same kind of thing.

Truth is, these shadow transactions ARE the problem and should be outlawed.

Risk needs to be borne by lenders. All the rest is an attempt to shuffle that off.

Old banking model: take deposits, loan money, collect payments, profit from interest, start again.

Good enough.

Reselling, hedging, all the rest, should be illegal. Will the financial industry be smaller? Yes.

Will huge fortunes be made overnight? No.

Will fewer loans be made? Yes.

Will fewer trades be made? Yes.

Will real wealth be created? Yes.

Will real assets be protected? Yes.

Will you have to go to Vegas or Atlantic City to gamble? Yes. Enjoy the shows.

[ellenfl]

3. why does that sound like satire to me? i had to check

the source twice. of course, it i guess it could just be the power of suggestion since i'm watching 'the onion movie'. :eyes:

ellen fl

[EFerrari]

6. No kidding!

lol

[MannyGoldstein]

5. As Jon Stewart Said "You Have No Best Talent To Lose"

Do they realize how badly they fucked up? I guess not, since the Obama people are still treating them with extreme deference.

[Lucky Luciano]

8. Do you honestly belive that they allllll fucked up.

In reality there were many huge revenue generators that did not lose money...but the very small subset of people that are responsible for having blown up the place are making everyone look bad.

[MannyGoldstein]

12. Actually, That's A Good Point nt

[NashVegas]

21. Really? Yeah

If any of these deserting rats had an ounce of integrity, they would have walked five years ago.

[Political Heretic]

7. "Talent."

[rocktivity]

9. "Brain" drain?

Is that what it took for all these banks to fail so spectacularly they needed THE GOVERNMENT to bail them out? And it took brains to believes they deserve a bonus anyway?

:crazy:
rocktivity

[scarletwoman]

13. Parasites jostling for new body parts from which to keep sucking blood.

"The nape of the neck has gotten too crowded, I think I'll head over to an armpit."

[JDPriestly]

15. That "top talent" is partly (a whole lot) to blame for our economic problems.

Good riddance. Time for some new ideas, new approaches.

[SoCalDem]

17. Walmart's gain.. nt

[opihimoimoi]

18. Some would call it pruning...cutrting the dead wood,....

[Egnever]

19. Wait a minute ! I thought they were all being rewarded with barrels of money!

:wtf:

[onethatcares]

20. the barrels aren't as big as they thought they would be

I mean, how do you expect one to keep a house in the Hamptons, a summer home in Nice, a small getaway place in San Marteen, the sailboat in Miami, the ranchette in Montana and the vacations wherever they feel like going on a piddly 3 to 6 million dollars a year?:yoiks:

[blue97keet]

22. The "top talent" had to flee to something less regulated,

not blow the whistle on the hanky-panky? What kind of top talent is that?

[mainer]

23. “If the risk-taking spreads out to these smaller institutions...

...it is no longer a systemic threat."

Um -- doesn't it make it more of a systemic threat? If risk-taking spreads everywhere?

[spanone]

24. meaning the 'top talent' that has fucked up the system???

[Deja Q]

27. Exactly

[Deja Q]

26. WAAAAAAAAAAAAAAAH

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[Hubert Flottz]

29. Good since those idiots were the ones that ruined the country

and were stupid enough to support Bush and the neocon war mongers.

Maybe they can go to Iraq and get a good job.