As the second quarter and first half of the year ends, some bankers will begin to warily hope that the effect of the global pandemic on the investment banking industry might not have been quite as devastating as might have been feared. However, as H2 counts down toward the end of the year, senior bankers in London will also be unpleasantly reminded that all the things they were worrying about in January are still here – they haven’t gone away just because they were “parked” to make space for the coronavirus emergency. In particular, Brexit is going to happen as of 31 December, with no delay to the timeline to reflect the amount of government bandwidth that has been diverted. And the current state of negotiations don’t look particularly friendly to people’s career plans.
In particular, EU chief negotiator Michel Barnier has said that the “equivalence decisions” that the UK will rely on to access the European market are very far from being a done deal. Although many on the British side had presumed that this would be a formality – the starting point, after all, would be an identical rulebook – Europe is worried about future divergence, and it gets more worried the more people talk about the benefits of deregulation. Even when these deals are agreed, it appears that the EU wants to retain the right to withdraw them at 30 days’ notice, which is a very difficult basis upon which to make investments.
There's also the issue of 'boots on the ground.' If the top management (or for U.S. banks, the EMEA top management) of investment banks are going to continue to be based in London, then the only model which will work post-Brexit will make heavy use of City Airport. In this scenario, top bankers would be constantly flying to Paris, Amsterdam, Dublin and Frankfurt to hold board meetings of local subsidiaries, but mainly managing the European operations by phone calls and emails from the mothership.
However, Barnier said yesterday that this is a non-starter. The European regulators, to put it bluntly, want to have their financial system managed by people whose doors they can knock on at 5am if they have to. They aren’t going to tolerate “back to back” transactions or “brass plate” subsidiaries, and at present, nor do they seem to be particularly hospitable to the idea of U.K. citizens, no matter how senior, hopping in and out of the European labour market to provide banking services.
Problems are made to be solved, of course, and the UK’s advantages in language, time zone and a deep domestic capital market and talent pool is an incentive to solve them. But complacency hasn’t really worked as a strategy so far, and time is running out. At the very least, any senior London banker who hasn’t yet scanned their family tree for an Irish grandparent would be well advised to get started.
Elsewhere, Accenture is preparing for the return to the office. It is also carrying out a series of stress reduction initiatives for consultants who were used to the stress of working twelve hour days on the road, but who were not ready for the different stress of fourteen hour days in their own home. The other issue, according to Jack Azagury, the boss of the Northeast US Accenture offices is "things that are just better done in person, like getting up on a white board and brainstorming with the group”
It’s all about the whiteboards, isn’t it? Just as a trading floor bro needs to have at least four flat screens, the consultancy profession finds it very difficult to think or communicate without a quick sniff of xylene and a step up to the big erasable comfort blanket. It’s quite likely that McKinsey could also reduce the remote-working angst by just getting a bulk order from Amazon and giving every consultant their own personal whiteboard, to stand proudly next to their kitchen table. In fact, rather than providing access to the Headspace meditation app, what the big consultancy firms really need are scented candles with the aroma of dry-erase markers, to take their hard working thought leaders back to their happy place.
“Don’t get me 20 basis points on a capital raise, allowing you to check the box and say, ‘I had a bunch of minority underwriters in there. I feel good about that.’ Whatever.” Citigroup Vice-Chairman Raymond McGuire has some sharp words for what he regards as tokenistic attempts on the part of some hedge funds to bring minority-owned boutique banks into deals. (Vanity Fair)
Can there be a sweeter labour market than German UHNWI wealth management right now? Claudio de Sanctis has a mandate to build up the franchise for Deutsche. Now Credit Suisse has taken André Spiewak from UBS to be its head of Northern Germany. And UBS is unlikely to stand still either. Good news for German private bankers. (Finews)
If you lose your rainmakers, expect a drought – after years of dominance in Australian ECM, UBS has dropped to fourth place in the league table, presumably at least partly due to the departures of Matthew Grounds, Robbie Vanderzeil and Guy Fowler. (Reuters)
William Vereker, who would be familiar with Santander from his time working with Andrea Orcel at UBS, has left JP Morgan to become chairman of its UK subsidiary. (Financial News)
At Credit Suisse, Rob Santangelo goes from Global Head of ECM Origination to Global Co-Head of Healthcare Investment Banking, while also being named Vice Chair of ECM; a classic IBD move when you need someone for a new job but can’t really spare them from their old job. (Reuters)
Eileen Murray, the former co-CEO of Bridgewater, will be taking the lead at Finra, the American self-regulatory body (WSJ)
Shirt maker to the lower and middle ranks of London’s financial services community, TM Lewin, is going into administration (City AM)
Dr Wayne Holman, who left the SAC Capital biotech team before things blew up, has founded a pharmaceuticals company with a promising COVID-19 drug. (FT)
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