Investment bankers and traders at European banks should expect at least a 15 percent cut in pay this year, while U.S. lenders may leave compensation unchanged, three consultants surveyed by Bloomberg said. That’s because bonus pools atEuropean banks may be reduced by as much as half, while those at U.S. firms, which can cushion the impact of falling fees in the region with earnings from home, may fall 20 percent, they said.
“The real split is coming, and we will see the quantum divide this year,” said Tom Gosling, a partner at PricewaterhouseCoopers LLP in London, referring to the difference in pay between the two financial centers. “U.S. regulators don’t have the same obsession with pay structures that European regulators have.”
While lower pay for all bankers reflects what may be a temporary drop in business, cuts at European lenders probably will be structural rather than cyclical, cementing a two-tier system, saidJohn Purcell, chief executive officer of Purcell & Co., a London search firm. They also could spur some employees to relocate, according to recruitment company Astbury Marsden.
From what I’ve observed, very few investment bankers of my acquaintance are in the business to help their fellow man; indeed, most seem to endure the rigors of late night parties and vacationing in tropical paradises with boring clients because of the money (gasp) and if the money’s here, not London, I’d expect to see a sudden influx of young City bankers flocking to our shores, eager to settle down and find homes in our toniest suburbs, God bless them.
Of course there’s always the possibility that Washington will try to emulate Europe and rein in bonuses, but Wall Street didn’t ensure Obama’s reelection to see him cut their pay and
our their man in the White House knows that. I’m sure they aren’t the least bit worried, nor should they be – Obama’s as honest as the judge who, when you bribe him, stays bribed. You’ve gotta respect that in a man.