Wall Street's charm gradually loss
Wall Street charm gradually lost
In the first nine months of this year, ten major Wall Street investment Banks FICC revenues fell 9% year-on-year, credit products income fell by a third, securitization transaction income fell by 21%.
Low "on the meal, my boss said disappointed with the current situation. Due to poor performance, this year the whole department may face not award the embarrassing situation. She has two children are at university, the university tuition fees rising continuously, but her salary is declining, it makes her feel ability not equal to one's ambition."Yang jie told reporters.
In half a month, Yang jie will end her internship in a Wall Street investment bank, on return trip.
"Now need to clean up too much before the purchase of furniture and household items, but not very busy work."In an interview with the international financial newspaper reporters, Yang Jiezheng busy packing.When it comes to their Wall Street internship experience, she said: "once looking forward, but now left don't feel too bad."
Six years ago, Yang jie, through the exchange of domestic colleges and universities program in the United States for further study.In the graduate student period, her tutor introduced because of the outstanding academic performance to a Wall Street investment bank internships.Yang jie, this year, after all study went on as an intern in the bank for half a year.
If both before and after the period of time up, Yang jie has worked as an intern in Wall Street for two years.
During this time, Yang jie is not left to chance, but she finally gave up to fill out a formal application for entry.On the one hand, because of the massive layoffs, Wall Street financial institutions in recent years lead to fewer and fewer interns can stay to become formal employees.On the other hand, due to recent poor performance, the Wall Street elite income also dropped a lot.
Data analysis of the company's Coalition, according to data in the first nine months of this year, the first ten big Wall Street investment Banks FICC revenues fell 9% year-on-year, credit products income fell by a third, securitization transaction income fell by 21%.
In fact, whether voluntarily or was forced to land, a growing number of financial practitioners away from Wall Street.The former barclays chief executive Jenkins (Antony Jenkins) late last month, said "the next 10 years, the number of staff and branch in the financial services industry could reduce 50% at most, even in the case of less severe, or at least reduced by 20%."Jenkins himself as the then chief executive of barclays, was sacked in July this year.
"Wall Street's big financial institutions especially investment bank, have announced their planned layoffs. Although announced job cuts are very large, but the real implementation, could not lay off a lot of people at once, but in batches. So in these two years on Wall Street, always can see holding the big carton to leave."Yang jie said.
But job cuts and is not the end.Through layoffs cut costs can beautify the short-term earnings, but will not hide the fact that Wall Street less competitive.In the face of increasingly powerful competitors, as well as the increasingly stringent regulatory environment, Wall Street will be a holy land in the minds of young people who aspire to in the financial sector?
Cut into a potluck
Statistics show that by the end of the third quarter of this year ten big Wall Street Banks at the front desk staff a total of 51000 people, and the third quarter of 2010 the number is 63900
Yang jie left Wall Street, choose home development.She said that she was completely give up to stay in the United States, work plan, "the company in my internship, which two years did not hire any employee, only by constantly to leave. But since late last year, and the family agreed to return to later, soon has confirmed the work of a domestic financial institutions, with my professional counterparts, and salary is very good. I think now the domestic development opportunity more."
Yang jie and have similar thoughts not only one person, more and more Chinese students to study abroad in Europe and the United States to choose home development after graduation.A foreign investment bank executives to international financial newspaper reporters: "the Wall Street financial institutions continued layoffs, development opportunities for overseas students to stay in Wall Street is more and more small. Even if some of the work has entered into the Wall Street financial professionals, with the change of the market is also more and more into the back to home."
In the first priority to ensure the shareholder returns for the Wall Street financial institutions, to improve the share price, layoffs become their common choice.
In early December, there is news that barclays plans to cut 20% of its investment banking business as early as next year, because the new chief executive Jes Staley hope to speed up to cut costs and boost profits.Among them, the biggest impact is Asian and global cash equities business.It is understood that barclays in Japan, Hong Kong and Singapore and other places to do business in Asia securities division, is say a lack of competition and profitability.
, according to people familiar with the job cuts could be announced as early as next year, it is in the existing 7000 investment banking jobs at the end of 2016 on the basis of further job cuts.By the end of December last year, barclays has 132000 employees, including about 20500 securities business department employees.The barclays bank is scheduled to the bank by the end of 2017 the total number of staff have fallen to below 100000 people around the world.
In fact, this is only the tip of the iceberg ".Morgan Stanley has formally announced 1200 job cuts, including fixed income department layoffs of 470 people, the scale is equivalent to the 25% of the world's fixed income department staff.The cover senior executive director to junior analyst layoffs.Another 700 - odd position is and solid related logistical support.The cuts will make Morgan Stanley one-time spending $150 million in compensation for layoffs.
Earlier, barclays in the UK's main rival royal bank of Scotland, the number of employees has declined from 2008 in 184500 to December 89700.HSBC announced in June this year, in order to boost the stagnant income growth, the bank plans to cut 50000 jobs and reduce 1/3 the size of the investment banking department.
In early November, standard chartered unexpected Revelations the third quarter pre-tax loss of $139 million, plans to cut 15000 jobs, about 2018 years ago and restructuring of more than $100 billion in assets.
Credit suisse in London since mid-november to cut about 200 traders, the bank seeks to cut up to 5600 employees worldwide, and restructuring and merger and acquisition services business.Most redundant the position will be in fixed income, including institutional trading and market making business.
Data analysis of the company's Coalition statistics show that by the end of the third quarter of this year on Wall Street, ten rows at the front desk staff a total of 51000 people, and the third quarter of 2010 the figure for 2010.Fixed income department staff 7000.
Layoffs, in fact, already become the norm in each big international Banks, a similar message is hard to cause large ripple in the market.Even before the layoffs, many feel "chill" selected active foreign bank employees leave.
Bad performance salary
On Wall Street, individual salary is directly tied to performance.Accompanied by the third quarter of poor market performance, Wall Street salary practitioners can also use "crash" to describe
Yang jie in fill in formal induction of application, development after returning home, she practice department boss asked her to eat a meal."On the meal, my boss
said disappointed with the current situation. Due to poor performance, this year the whole department may face not award the embarrassing situation. She has two children are at university, the university tuition fees rising continuously, but her salary is declining, it makes her feel ability not equal to one's ambition."Yang jie told reporters.
In fact, even those lucky enough to avoid layoffs this "machete" and to remain in the Wall Street financial institutions of practitioners, their days have also been more and more difficult.
According to the Options Group, a new report shows that in addition to the 2009 "a flash in the pan", since 2007, the Wall Street workers compensation has been a downward trend.
The report quoted the best investment Banks all business departments performance of the top ten companies 25% traders point of view, and salary, including basic salary and bonuses.In many business department, the report found that pay the most close to the level of boom is the department of foreign exchange.Current stock, securitised products, credit departments of compensation are less than half in 2007.
The personage inside course of study or even "crash" is used to describe the current situation of Wall Street pay.Wall Street's big salary has been cut size, Morgan Stanley in the third quarter of this year's salary, $1 billion less than the same period last year, in the third quarter pay was cut by almost 16% over the same period last year, jp Morgan cut by 7%.In 2015, is likely to be for the first time since 2011 to slash their year-end.
Compensation consulting firm in New York Johnson Associates, general manager Alan Johnson said, "it's disappointing. This is the year of unrest and tension, bonus fell, but the feeling is very bad. This year will be a turning point, Wall Street firms will have to revisit their cost structure."
According to Alan Johnson, the uncertainty of the situation, or will continue into 2016, Wall Street investment Banks will further reduce their staff size.
"Pay less, will naturally have unhappy negative emotions, the financial industry, but is a eat their performance, personal income and performance directly. In such a dismal performance market, cut salaries and bonuses would be hard to complain."The United States at the university of Chicago professor of management at jamie GeSu to international financial newspaper reporters.
Despite the fourth quarter earnings to wait until 2016 to come, but the market pessimism is already filled.
From the Wall Street financial firms' public half annals and third quarter, dismal performance in 2015.According to the Coalition in the first nine months of 2015, Wall Street's top ten investment Banks FICC generated $52.8 billion in revenue, stock sales and trading business income of $35.4 billion, traditional investment banking revenues of $29.6 billion.
Coalition of data at the same time, according to the first nine months of this year, the top 10 Wall Street investment Banks FICC revenues fell 9% year-on-year, credit products income fell by a third, securitization transaction income fell by 21%.
On October 29, deutsche bank, according to a statement in the third quarter net loss of 6 billion euros.
Under pressure from huge losses, the bank executive team members "big changes", crucial investment banking will be split in two, on January 1 next year is divided into "corporate and investment bank" and "world market" departments, in addition to wealth management business will also be split into two departments.
Financial commentators ho chi sing that Wall Street Banks operating income in the third quarter, a big drop in its main causes include periodic fluctuation amplitude and frequency of the international financial market to speed up, commodity market fell again more than expected in the third quarter, and the Asian currency markets a sharp fluctuations."It is also expected market phenomenon, lead to some bank error."Ho chi sing said.
But jamie GeSu pointed out at the same time, even though the Wall Street financial institutions practitioners are paid a sharp decline, but compared with other industries, the financial sector is still high pay industry.But many ordinary americans on Wall Street has been the high.
Farewell to the era of high profit "as the Wall Street financial institutions, staff salary nature should be decreased. Just accustomed to the well-paid people tend to be more difficult to adapt."Jamie GeSu said.
Increased competition less profit
The volatility of the market may explain the poor performance on Wall Street, but from the asia-pacific region or competitors in the field of IT, are eating into profits, these financial giants to empty them
Although a lot of financial industry practitioners will be the second half of this year's poor performance due to the global market volatility.But there are also the expert points out, the challenge for the Wall Street more than that.Jamie GeSuBiao, the changes of the era environment, and the change of the global financial landscape, is the Wall Street financial institutions in the next few years or even decades to the challenge.
The continuing global oil prices are low for Wall Street investment Banks become more and more difficult to breath.When the Banks in the us shale oil boom are to provide a large number of loans to the oil companies.Now, however, lower oil prices are these energy companies to bring huge financial pressure.Oil revenue is drying up, these companies with huge debt burden.America's biggest Banks are lending for energy companies raise red flags.In the second quarter, America's big Banks warning their energy company loans to investors.
Rafferty capital analyst Dick Bove said, "each big bank loans because they give energy company suffers a loss. This is very obvious, whether oil prices at $30 a barrel or $80 a barrel."
Wells Fargo said, because of the energy field the situation worse, companies have to prepare more cash deal with potential business event of default.Reserve bank report shows that companies in the United States may require additional 15% of the funds used to deal with commercial loan risk, especially loan problem in the field of oil and gas.
Jpmorgan chase in the third quarter also increased its loan loss reserves of oil and gas field, for $160 million.Jpmorgan chase's chief financial officer, marian Lake (Marianne Lake), said the company the reason for this is expect oil prices will remain low.
"If the market has ups and downs, the Wall Street investment Banks and therefore have to make compensate is a normal fluctuation. So, some changes are more Wall Street investment Banks have a headache."The foreign capital bank executives told the international financial news reporter, "competition from Asian peers and the rise of sovereign wealth funds, east Wall Street investment Banks something."
Thomson Reuters published a study of a quarterly survey of investment banking activity, although this year's Asian equity fundraising record, but the cost of the Wall Street Banks get there are falling, because Chinese rivals are eating into their profits.
1 - September this year, the asia-pacific region (excluding Japan), the amount of shares surged 40% year-on-year, to $197.2 billion, Goldman sachs and ubs, the top two in the underwriters.
At the same time, according to estimates, multinational Banks in the asia-pacific equity capital market (ECM) fee income fell or flat, this is because an increase in the asia-pacific market competition.Asia ECM fees in the top 10 Banks, four for multinational Banks.Ubs ranked first among them, the first 9 months fee income estimated at $205.9 million, nearly flat over the same period of last year.While Goldman sachs and Morgan Stanley's fee income fell by about 20%, jpmorgan fell 15.7%.
In contrast, China's six big brokerage fee income increased,Citic securities,(18.62, 0.10, 0.53%) fee income rose nearly 50% to $246 million;Guotai junan(25.14, 0.12, 0.48%) fee income increased by 58%,China merchants securities(22.88, 0.04, 0.18%) fee income nearly doubled.
In addition, now the rise of the global financial industry also brought shock to traditional Wall Street financial institutions and threats.Some famous financial people is to the banking financial technology startups rapid rise of warning.Jenkins said in a speech: "existing Banks are facing huge pressure, they want to in the realization of new technologies and new competitors, it will be difficult to keep synchronization."
Recently software company, according to a survey also Temenos banker is generally believed that technology will become the greatest threat to their cause, with more than half of those who said IT plans to increase investment in IT this year.
Jamie Dimon, chief executive of jpmorgan chase, Jamie Dimon warned: in the annual report to shareholders "silicon valley."
In his view, for jpmorgan chase, such company, innovation and efficiency is critical, especially on the loans and payment business.In the past, such as loans, payment and wealth management business can only be dealt with, go to the bank and the recent financial technology start-ups because provides a cheap and effective way of service attracted a lot of attention.
"Hundreds of startups are alternatives to traditional Banks, they have a lot of talent and capital."Jamie dimon wrote in a report, "you read most about loan business, the enterprise can and believe that can improve the credit guarantee, by big data quickly and efficiently to borrow money to individuals or small businesses. They are very good at reducing pain points, can be in a few minutes to grant loans, the Banks may have to spend a few weeks time. We should strive to make the service as well as their competitive, we are all for meaningful cooperation with them."
Regulation tighter difficult to adapt
Regulators have correlated regulations, make Wall Street financial institutions is more and more feel tied down
Near the end of the year, in addition to bad results that Wall Street headache, the other is a matter of "concern" must make the business indicators to meet the new regulatory standards.In jamie GeSu point of view, although America's new financial regulatory scheme has been launch in many years ago, but each big financial institutions on Wall Street seems to be always behaved "maladjustment".
"In the past few years, although almost all Wall Street Banks are in one way or another asset restructuring or business adjustment. But this trend is far from over, the future of Wall Street financial institutions also need to spend a long time to adapt to the new financial regulatory environment. After the adapted to the loose environment, for strict regulation, financial institutions first show is refuses and resistance."
Now, Wall Street investment Banks are trying to sell billions of dollars of loan assets, these assets are formed during the period of mergers.After the financial crisis, regulators require Banks to increase capital cushion risky assets, and at the end of the year is a time of capital calculation pass.Wall Street investment bank must bring mergers of excess loans by the end of the assets sold, its risky assets to reduce exposure to the lowest.
Due to reasons such as credit easing, the United States in 2015's record total of mergers and acquisitions.Low-interest loans and long-term oil prices in the United States under the bottom of the market expectation, mergers and acquisitions into the high stage, it also makes the big investment Banks.
According to the financial data provider Dealogic figures released in July this year, in 2015 in the first half of the total amount of mergers and acquisitions topped $1 trillion, up nearly 50% from the same period a year earlier, hit a record high.And the total amount of mergers and acquisitions this year is expected to reach $3.7 trillion, second only to before the financial crisis in 2007.In 2007, is so far the only a volume of more than $4 trillion a year.
However, the price of such assets into the third quarter fell sharply, causing investors to disastrous.Now the market is a lack of interest on such assets, which makes a large number of such credit assets in hand, the Wall Street investment Banks are very anxious.
"Although the merger and acquisition of credit assets price is quite low, but many Banks are still the assets quality, and believe that prices will rebound in the
future. Some Banks are reluctant to sell those assets, just due to regulatory pressure and had to sell. And at the current sale, apparently another pen lose money probably unavoidable."Jamie GeSuBiao.
At the same time, financial regulators constantly updating rules, for Wall Street financial institutions, more and more feel tied down.On November 19, the U.S. house of representatives by 241 votes, the vote in 185 approved the bill of the fed's regulatory reform and modernization.Although this act aims to strengthen the supervision of congress on the fed, increases the transparency of the federal reserve, prompting more responsible when its monetary policy.However, some of these terms and conditions on the impact of the Wall Street financial institutions also.
The bill clause 11 requires to reform the fed's emergency loan
authority.According to the terms and conditions, only in the "pose a threat to America's financial stability" is not normal and emergency fed to exercise the right of emergency loans.The Wall Street financial institutions, is in a crisis occurs less protection.
The personage inside course of study thinks, the federal reserve act as lender of last resort to save the financial crisis has played an important role, but it also encourages financial institutions to a certain extent of high-risk investment behavior, and even speculation.
Before the financial crisis in 2008, a large number of financial institutions, including Goldman sachs, a lot of investment, real estate, such as mortgage-backed securities (MBS) risky assets, get rich rewards when real estate prices, however, as the real estate bubble burst, but these institutions will depend on the fed's emergency loan.Therefore, when the role of the federal reserve act as lender of last resort, the American people will think the fed is in greedy bankers take taxpayers' money to rescue Wall Street, says the fed dominated by Wall Street financier and demanding that the federal reserve to reduce crisis rescue of these financial institutions.