OT: shortage of investment bankers

Well, since theres much off topic related to the election ... On the news this morning, a high up bod in RBS agreed top investment bankers pay is rather hard to justify, but he said that is the market - a shortage of top bankers. He said the banks have to pay the high salaries else the bankers will leave. He implied that when one of these guys moves job he takes with him lots of business or clients. If that is the case, its understandable why they will pay to much - the wage gets them a banker AND lots of clients. Question: 1. Why do market forces not appear to work in this case to bring in lots of other "top bankers" so pay levels come down ? Are the skills really that rare ? Is there some distortion to the market, intentional or otherwise ? 2. If they will leave where will they go ? If US (obama is trying) and EU act together will they all go to the east ? Or just not bother to work at all ? Simon.
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sm_jamieson wrote:

No the shortage principle only works for us proles it seems. I once ran a youth training centre and had trouble getting really good staff at the salary offered. 'Do you get applicants?' was the reply from government. 'Yes'. 'No problem then'. I suggested that the same principle might be applied to ministers' salaries. Null points!
Peter Scott
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On Fri, 30 Apr 2010 02:14:17 -0700 (PDT), sm_jamieson

The financial services industry already takes most of Britain's brightest people as they leave university. Unless you think there are a lot of extremely bright people not going to university that you could encourage to go, how would you increase the supply of top graduates with the necessary literacy, numeracy and problem-solving skills?
The other day I heard a professor of engineering at one of Britain's top universities bemoaning the fact that the majority of his engineering graduates who gain First or Upper Second Class degrees don't choose engineering careers, but go to work in the City instead. Apparently, their mix of abilities in numeracy and problem-solving is incredibly attractive to employers in the financial services industry. And the engineering graduates are apparently happy to go there to work because their starting salaries are at least double what they would get in engineering.
Unfortunately, this means that the engineering professions are denied many of the best people. If you want to know why the UK manufacturing sector has rapidly shrunk while the financial services industry has hugely expanded, look no further.
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Bruce wrote:

I was told by a city slicker that "it helps to be as thick as pig shit to work in the City". Anyone of a more sensitive disposition would a) not sleep at night and b) not be able to look at himself in the mirror next morning. The financial services industry attracts the greediest, rather than the brightest, people. Lawd Sugar (or whatever he calls himself) personifies what we in this broken backwater of a country regard as "business".
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On Fri, 30 Apr 2010 11:05:55 +0100, stuart noble

I wasn't talking about traders on the floor of the stock exchanges.
It is quite true that a Cockney barrow boy would be better suited to that role than a highly qualified professional.
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wrote:

for a time many traders were sons of east enders, quick and sharp.
--
Mike

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On Fri, 30 Apr 2010 12:19:45 +0100, Allthumbs

Indeed, and on the trading floors it is still often the case.
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Bruce wrote:

As a fully qualified degree level engineer, I can utterly concur with the above.
I never was paid a living wage until I paid myself one, by learning how money works and starting my own businesses.
As long as the country could make more by financial engineering (=smart bullshit) it didn't need engineering. It could import that. See the result.
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Not true. Whilst the city does favour good graduates from highly numerate disciplines, particularly from the Russell Group of universities, it's only a small proportion (probably around 5%) that go to the city.
And a lot don't last - I can think of several friends that have either left or want to - saying the money just isn't worth what they have to put up with.

Imperial by any chance?
Again I would dispute that very many go to the city, the culture change from engineering to banking really doesn't suit most people that choose engineering at university.
If the city has an under-supply of top talent - in spite of offering vastly greater financial rewards than other sectors - then they need to look at working conditions, their culture, how people are treated, and what they need to do in order to attract people for whom personal greed is not the biggest thing in their lives.
There's plenty of extremely bright and suitable people that choose engineering or science research in indusrty, medicine, government research centres, teaching or university lecturing - phenomenally talented, reasonably well paid in most cases, but not excessively so - and without money as the overriding motivation in their lives.
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wrote:

that's because the banks have all the money, not because its the most challenging area.
--
Mike

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wrote:

No it doesn't. It cherry picks staff on the basis of things other than "brightness". There's many a barrow boy who's made it in the city
tim
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It varies. FX spot traders tend towards the barrow boy end of the spectrum, whereas the average quant or options trader may well have a numerate degree.
And of course, not everyone you see on the telly on a trading floor is a trader, or on a trader's money.
--
Today is Setting Orange, the 47th day of Discord in the YOLD 3176

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sm_jamieson wrote:

It's pretty simple really. If I put a billion on Chelsea to win the Premier League, and you put a billion on Man Utd, one of us will be hailed as a successful investor and the other will retire to the Cote d'Azur on his golden handshake.
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3. Why do they not have "non-compete" contracts that do not allow them to poach former clients when they move to a new employer? They're common in many other jobs.
MBQ
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Because the client is free to put his business wherever he chooses, a bank has no control over that.
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In article

Just a guess, but presumably because they would say "I'm not signing that, I'll look for a bank with better Ts&Cs". The same must happen with Chief Exec jobs at local authorities and other so-called "public" sector jobs.
--
Tim

"That excessive bail ought not to be required, nor excessive fines imposed,
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wibbled on Friday 30 April 2010 11:34

The whole scam is like house prices and petrol prices. They are kept high. If you notice, as soon as one of the supermarkets decide to start a petrol price war, everyone drops and they don't seem to go out of business. Round here there are lots of people trying to sell houses that have been on the market for a very long time. But noone wants to drop the price. As soon a a few do, that's it - the market will shift. The law of supply and demand seems to have a 3rd variable: illusory worth. If the illusory worth is high, noone will sell anything for less even if there is plenty of demand at a lower price. Crazy.
--
Tim Watts

Managers, politicians and environmentalists: Nature's carbon buffer.
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Man at B&Q wrote:

Because on the whole they're not worth the paper they're written on.
There's a basic human rights principle (not sure if it's written down, so can't quote chapter and verse) that you can't contractually prevent someone from earning a living. This principle effectively overrides many aspects of non-competition clauses. All the employee has to do is argue that (during the period of the clause) they needed the money and banking was the only skill-set they had which they could leverage to make money.
In terms of not poaching clients, all the employee has to do is tell his clients he's leaving and how to keep in touch (nothing wrong with that, could be for personal/social reasons) and the clients will choose to stay with the old bank or move with the banker to the new bank. As long as the old bank can't prove that the ex-employee induced his/her clients to move or slandered/libelled the old employer, then there's no problem.
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So if the real issue is clients tranferring with the employee, presumably bankers that fail their clients should go out of the picture. But that does not seem to be happening. Simon.
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Oh it does - a significant proportion leave the trading desks every year, some having been very successful, but many more having failed or been burned out.
--
Andrew Gabriel
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