OK, so the mid-year transfer window is over for another year. I couldn’t help but show my disappointment that Harry was not able to add a strong, consistent goal scorer to the team despite the £40mm of the ‘Queen’s finest’ at his mercy. Instead, he makes us believe that it was a close call for a Blackpool midfielder, who would have just simply added to a long list of existing midfielders. Why couldn’t we just have signed Torres and be done with it. Champions League and Premiership title sewn up in the first season!

Anyway, now that I have that off my chest, I suppose the real point to this blog is the hypocrisy that surrounds us all, whether we are sports fans, business people, or simply opinionated members of the public.

For the last three years, “banker bashing” has become synonymous with the collapse of the global economy (if it hasn’t already done so, the term might even make it into the next edition of the Oxford English Dictionary). We all know that the credit crisis / sub-prime catastrophe was largely a result of huge risk taking by bankers who were not fully knowledgeable of the products that they were actually selling. As long as their activities produced a healthy profit, everything was ok – no questions asked. The ultimate bubble that was created and eventually burst, destroyed not only a couple of long-established and previously successful banks, and now has a number of European countries teetering on the brink of bankruptcy as well.

Despite the extent of the financial turmoil that spread around the world, it still remains the case that the global economy is heavily reliant on the financial services sector and this means banks around the world need to continue to attract talented bankers. As a leading global financial centre, the UK needs the City of London and its financial services institutions, not only to provide jobs; offer credit to new business start-ups or first time home buyers; but also to supply a regular and considerable income (through taxation) to the Government.

It’s an interesting irony that in four weeks a handful of football clubs can spend over £200mm on 9 players and fans will continue to flock to their respective clubs to support them. Yet three years on from the start of the financial crisis, there is still significant animosity towards almost anybody who chooses a demanding career in the investment banking world.

Irony or hypocrisy? Why don’t you decide…

"banker bashing", Financial Services, Football

November 17th  (Bloomberg)  -  Chris Leeson, managing director at Morgan McKinley, talks about U.K. employment and the outlook for the economy. He speaks with Andrea Catherwood on Bloomberg Television’s “The Pulse.”
(Source: Bloomberg)

http://www.bloomberg.com/video/64578684/

5% Increase, Andrea Catherwood, bloomberg, Chris leeson, Financial Services, FS, Job vacancies, London, Morgan McKinley, Morgan McKinley London employment Monitor, Salaries, The Pulse

Donald noticed the potentially high valuation of the credit default swap

There is a buzz in the office around the launch of Morgan McKinley’s new technology desk. This newest specialist function of our business will focus on financial services IT recruitment; a market that has become a major talking point in Q4 2010.

There are three main drivers of demand in technology and technology spend right now: speed, regulation and risk management.

As banks de-leverage and trading activity becomes more vanilla, firms are looking to gain advantage through high speed transactions (we’re talking trading in nanoseconds rather than milliseconds). Additionally, as the market stabilises after the crunch and financial cycle of the “naughties”, controlling bodies and regulators are keen to ensure we avoid repeating mistakes. Technology is providing a framework to meet the more stringent requirements of internal compliance and regulatory departments. Allied with this, the technology required to manage risk has become increasingly complex.

Banks and other financial institutions are looking to attract the best talent in technology to meet these challenges. Over the next three months, Morgan McKinley will listen to its client needs and grow its technology desk to meet this demand.

The foundations of our business will be built on a strong network of experts in support (first, second, third and fourth line), development (e.g. Java, C#, C++ and SQL), business analysts and project managers.

More and more banks are increasing their IT hiring spend – especially in global financial hubs such as London, New York, Singapore and Tokyo – mirroring our global office network. We’re excited about the possibilities for our new technology specialists. Watch this space.

Financial Services, IT, technology

As many of you who work in the financial services sector are aware, this week signifies the two year anniversary of the collapse of Lehman Brothers. Images of that historical day are still vivid in memory; graduates turning up for their first day of work only to be told to turn around and go back home. Similarly, the more experienced and dedicated, long-serving employees, packing up their desks and walking out, clearly shell shocked that such a huge, Wall Street institution could fail in such a manner. Little did everyone know that this was to be the start of a long and arduous period in the UK, and the global economy.

Although the sub-prime problems were in full swing by the morning of 15 Sept 2008, Dick Fuld’s inability to consider the bank’s 25,000 employees and let his business collapse further fuelled the events that were to follow. Stock markets plunged to levels that had not been witnessed since another history changing event that took place in September seven years previous. A number of other banks had to be bailed out / nationalised to prevent further financial ruin in the market and of course, millions of people were made redundant.

Many have argued and petitioned for tighter regulation in the markets. What used to be a free and open market has now seen a number of initiatives / solutions been set to ensure another downturn of this nature does not occur again. Although not actually implemented as of yet, President Obama has endorsed the Volcker rule, which would essentially prevent banks from engaging in proprietary trading, and also ownership of hedge funds or private equity businesses. Furthermore, Angela Merkel decided at the turn of 2010 to ban naked short-selling as a result of the threat of a potential collapse of the Euro. The latter in particular highlights the problems faced across Europe – Ireland, Spain, Portugal and Greece have all had to face and fend off the threat of sovereign default.

The most recent change to global banking is the Basel III regulation. This requires banks to increase capital so they can be prepared for distress situations. Although the new regulations will not be fully implemented until January 2019, work has begun to ensure that tier 1 ratios hit 6-8% by that time. This transition is particularly important in that it doesn’t present another credit crunch crisis, with institutions not lending money in order to protect their capital adequacy ratio from falling.

Much has happened in the two years since the collapse of one of the most reputable banks on Wall Street. Aside from the above, the UK has witnessed a change in Government, which has highlighted the importance of austerity. The country returned to growth in the last quarter of 2009 and at the start of 2010 it was confirmed that the UK had come out of recession – one of the last major economies in the world to do so. This growth has continued within the financial services sector with headcount increasing exponentially (particularly in Q1), compared to 12 months ago. Where they previously cut too deep following the collapse, institutions are now looking to add resources to compensate for additional business flow this year.

In conclusion, whilst it has been mooted that it could take another 10-20 years before the associations of Lehman Brothers are completely wound up, it is hoped that if the threat of a double dip isn’t realised and hiring continues at its current rate, it will be a lot sooner before the UK economy can return to greater times.

Austerity, Banking, Basel 3, Credit crisis, economy, Financial Services, Lehman Brotheres, recession, Sub prime, Unemployment, Volcker Rule