Should we feel sorry for (investment) bankers?

[Phube]

Should we feel sorry for bankers?

By Finlo Rohrer

BBC News Magazine

With thousands of bankers suddenly out of work after the Lehman Brothers crash, will they land on their feet and quickly find work, or should we feel a pang of sympathy for them?

There are many people who do not take a sympathetic view towards investment bankers.

From American fiction we get the greedy banker of the film Wall Street and the hubristic banker of Tom Wolfe's novel Bonfire of the Vanities.

Indeed the latter's Sherman McCoy has provided easy newspaper headlines in recent days. In boom times they can find a new job or go to a hedge fund - a lot of people are going to have to quit banking

Allister Heath, editor, City AM

Should we feel sorry for estate agents?

"Bonfire of the vanities as Wall Street and the City get their comeuppance," says one newspaper. Another shouts: "Downfall of the masters of the universe."

One can almost sense a degree of schadenfreude for those seeing an Icarus-like fall of epic proportions. If you believe one extreme view, bankers are greedy people who have taken unacceptable risks and are now suffering the consequences.

But as besuited men and women, laden with cardboard boxes, stream mournfully out of the offices of Lehman Brothers, and perhaps other giants soon, is it time to feel sorry for bankers? Or is it acceptable for people to revel in their downfall?

"I don't share this view," Allister Heath, editor of City AM, a newspaper that focuses on London's Square Mile.

"A lot of people will think 'who cares'? Some people will be privately satisfied but it is short-sighted. Yes, they have made terrible mistakes, but it is just wrong to take pleasure in other people's misfortunes.

Mass redundancies such as at Rover in 2005 prompted much public sympathy

"Their misfortune will make everyone else worse off. They have powered the UK economy in the last few years."

During the boom years, bankers earned big bonuses and it is perhaps not surprising that some felt resentment. The same people may now feel no sympathy for sacked bankers, as they will land on their feet, finding other jobs in the City and resuming their rapid wealth-building once things pick up again.

But, with Lehman Brother having laid off 4,000 people in London alone, and other big financial institutions facing straitened times, things may not be so easy.

"There is a bloodbath in the financial markets," says Mr Heath. "In boom times, when a banker loses their job, they can find a new one or go to a hedge fund. A lot of people are going to have to quit banking."

And while City recruitment firms will be deluged by suddenly out-of-work high-fliers, there may not be jobs for everybody, says Lucy Robinson of financial recruiters Jonathan Wren, a subsidiary of Adecco.

"From our experience the saturation point of free vacancies versus available candidate was reached six months ago across more or less the whole of the City. An absolute like-for-like move is going to be impossible." NEGATIVE FINANCE PORTRAYALS

Wall Street

Bonfire of the Vanities

Rogue Trader

Mixed portrayals:

Mary Poppins

It's a Wonderful Life

Of course, even in a slump, the best of the banking world will still be in demand as they mill in between the glass towers of City finance.

"I understand a few headhunters were setting up in Starbucks just to be portable locations for people to come and see them," says Ms Robinson.

And some people may not realise the massive range of salaries in the world of investment banking. With the emphasis in the media on the top earners and their telephone number bonuses, few thoughts will be spared for the younger bankers on more modest salaries.

Of course, it is not unknown in high finance for some to decide they have had enough of the "rat race" and take redundancy, or even for graduates to enter investment banking with a definite plan to depart.

Ed How, 34, spent five years at Deutsche Bank after university before quitting in 2002 to pursue a career as a science teacher at a private school.

The rewards can be huge... but junior staff don't get headline salaries

"The banker's dream is by the age of 40 to retire. It doesn't often happen - the amount of money you need goes up year on year."

Mr How, who had always felt drawn to teaching, chose the manner of his departure during the post 9/11 downturn.

"Post 2001, things weren't as great, the work wasn't as exciting. I was looking for an out. I had almost been planning, I didn't buy a house so when I chose to change career I didn't have to sell."

And while there are some at Lehman Brothers that may be plunged into penury because of big mortgages and other outgoings, the naturally pessimistic will have made sure they had a security blanket.

"Who knows how much financial planning they have been doing? Some work on the basis you are only as good as the next month - they always tried to keep six months salary in an emergency fund," says Mr How.

Aggressive and macho

And whether bankers are leaving to fulfil an ambition or because of a rampant crisis, there are some things they will miss. I had learned painfully the importance of filing and I am a demon at spreadsheets

Ed How, on a banker's transferable skills

"Possibly a bit of the salary, but I'm not exactly on the breadline," says Mr How. "The lifestyle you lead changes. I was living in London... the expense of living in London, when you go out for a drink or a bite to eat. I socialised more. That was the scene."

As well as those who have taken out monster mortgages, there are some at Lehman Brothers who will have most of their money sunk in now-worthless shares in the bank.

All a lot of them will have left will be the skills they have built up in their work, says Martyn Sloman, learning, training and development adviser at the Chartered Institute of Personnel and Development.

"They range from people who come from the lending departments - quite a lot of them have got fairly good interpersonal skills; people who work on the trading floor - a lot of them are very aggressive and macho people. But they have quite strong quantitative skills, tending to be pretty numerate."

Working as a banker helped Mr How with some aspects of teaching.

"I had lost a bit of naivety, I had learned painfully the importance of filing. I was and am a demon at spreadsheets."

It is going to be difficult for many people struggling with their own financial difficulties to feel sorry for bankers, but there's no doubt that many of them are facing an uncertain future.

Errr... NO!

I will instead at them...

[Dr The Singh]

Errr... NO!

I will instead at them...

I feel sorry for any worker that loses there jobs!!!

[James.]

Errr... NO!

I will instead at them...

Do you group bankers all in the same bracket Phube? Are you therefore laughing at the settlements clerk who earns £20,000 a year but is now out of a job and will not be getting paid anything on Friday because her firm is now bankrupt? Are you laughing at the middle office banker with a family to feed who received £10,000 of Lehman shares as a bonus last year but those shares are now worthless, he's out of a job and he won't be getting paid on Friday either?

I don't think that's particularly funny.

[The People's Hero]

It's not funny... but this really should have been avoided.

It's so sad but there are big lessons to be learned.

[Phube]

Do you group bankers all in the same bracket Phube? Are you therefore laughing at the settlements clerk who earns £20,000 a year but is now out of a job and will not be getting paid anything on Friday because her firm is now bankrupt? Are you laughing at the middle office banker with a family to feed who received £10,000 of Lehman shares as a bonus last year but those shares are now worthless, he's out of a job and he won't be getting paid on Friday either?

I don't think that's particularly funny.

Clerks, Secretaries, PA's, Cleaners, Assistants etc. I feel sorry for... But then they're not Bankers...

They brought it on themselves (and the WHOLE Country!!)... they deserve only the best! (It's just a shame that the non-bankers will struggle and the proper Bankers will probably just go into cushy over-paid jobs later on... )

[hairy]

I dont like to hear anyone losing their job but bankers...........these are the guys who gave themselves £1m bonuses at Christmas

[James.]

It's not funny... but this really should have been avoided.

It's so sad but there are big lessons to be learned.

They're learning the hard way right now. Things will change after the dust has settled. But there's a long way to go yet.

It is however f**king idiotic to laugh at people who are now unemployed and without their final month's pay through absolutely no fault of their own. Well done Phube. Let's hope you never have to go through that eh?

I dont like to hear anyone losing their job but bankers...........these are the guys who gave themselves £1m bonuses at Christmas

You'll have to tell me which bank becaue I sure as hell didn't give myself a £1 million bonus.

Ridiculous generalisations going on here.

[James.]

Clerks, Secretaries, PA's, Cleaners, Assistants etc. I feel sorry for... But then they're not Bankers...

They brought it on themselves (and the WHOLE Country!!)... they deserve only the best! (It's just a shame that the non-bankers will struggle and the proper Bankers will probably just go into cushy over-paid jobs later on... )

So who are the bankers then? Where do you draw the line? Or do you just not understand anything about the industry and are making silly generalisations?

[Phube]

They're learning the hard way right now. Things will change after the dust has settled. But there's a long way to go yet.

It is however f**king idiotic to laugh at people who are now unemployed and without their final month's pay through absolutely no fault of their own. Well done Phube. Let's hope you never have to go through that eh?

It was they're own fault!!!

My Dad was made redundant after 37 years in his job... He probably didn't get anywhere near their Annual Bonus... for his WHOLE 37 years work!!!

So who are the bankers then? Where do you draw the line? Or do you just not understand anything about the industry and are making silly generalisations?

I'm not talking about people who work in Barclays as Cashiers, or even Branch Manager...

I talking about Investment Bankers, the tossers who CAUSED this whole credit crunch!

[Finnegan]

No. The ****s just took my overdraft.

[James.]

It was they're own fault!!!

My Dad was made redundant after 37 years in his job... He probably didn't get anywhere near their Annual Bonus... for his WHOLE 37 years work!!!

I'm not talking about people who work in Barclays as Cashiers, or even Branch Manager...

I talking about Investment Bankers, the tossers who CAUSED this whole credit crunch!

Ok, investment bankers. I work for an investment bank. Am I to blame as well then? You don't really know what you're talking about here Phube.

[Phube]

Ok, investment bankers. I work for an investment bank. Am I to blame as well then? You don't really know what you're talking about here Phube.

Depends... did you benifit from banking (betting) on this whole Sub-Prime (i.e. taking advantage of the poorest people in America) Mortgage malarkay?

[Phube]

Try Watching on 4OD - Dispatches: How the Banks bet your money!

Facinating insight...

Also, Dispatches: How the banks NEVER lose!

[James.]

Depends... did you benifit from banking (betting) on this whole Sub-Prime (i.e. taking advantage of the poorest people in America) Mortgage malarkay?

See, now we're getting somewhere.

You've gone from blaming bankers, to blaming investment bankers, to blaming the minority of investment bankers involved in structured credit products. You'll get there eventually Phube.

You're assumption that they were "taking advantage of the poorest people in America" looks like a comment by our old friend Lemon Harpic and isn't particuarly accurate but we can address that another time.

In answer to your question, no, I am not involved in that area.

[Dr The Singh]

Depends... did you benifit from banking (betting) on this whole Sub-Prime (i.e. taking advantage of the poorest people in America) Mortgage malarkay?

That's a business decision though Phube, the individual bankers just would be doing there job on instructions of there directors etc. Why should they be to blame?????

See, now we're getting somewhere.

You've gone from blaming bankers, to blaming investment bankers, to blaming the minority of investment bankers involved in structured credit products. You'll get there eventually Phube.

You're assumption that they were "taking advantage of the poorest people in America" looks like a comment by our old friend Lemon Harpic and isn't particuarly accurate but we can address that another time.

In answer to your question, no, I am not involved in that area.

I miss him, he was such a great guy, I hope he comes back to the forum and soon!!

[Babylon]

Anyone that says "ya" and not "yes" or "yeah" deserves it.

[breadandcheese]

See, now we're getting somewhere.

You've gone from blaming bankers, to blaming investment bankers, to blaming the minority of investment bankers involved in structured credit products. You'll get there eventually Phube.

You're assumption that they were "taking advantage of the poorest people in America" looks like a comment by our old friend Lemon Harpic and isn't particuarly accurate but we can address that another time.

In answer to your question, no, I am not involved in that area.

I would lay the blame solely at those bringing the business in and doing the deals, be that traders, investment bankers, whoever. Let's be honest, there was never any loyalty to the company. A city trader or an investment banker should know what they are, and that's turning tricks for whichever bank pays them more. A whore should expect to get ****ed at some point.

At bonus time last year, had Lehman Brothers turned round and said, sorry lads and ladies, we foresee a tough upcoming year. Severely reduced bonuses all round. How many traders and deal-makers would have said, no probs, we understand, let's look to building up the strength of the company balancesheet? How many would have been hitting the phones to every headhunter going looking to move? There is very little loyalty to long-term building of a business. It is a culture very much on short-term emphasis, which has helped to foster the loose deal-making on unsecured credit terms.

Whilst the sub-prime market may have been the start of this, the same problems will filter through into some of the highly leveraged acquisitions we've seen over the past few years. There are a number of companies that look like failing to meet their covenants.

Unfortunately, through all this, it will as you say be the lower level employees who suffer and that is the sh*t part. I guess those traders who made large bonuses, and those investment bankers who were involved, have managed to win at this game of poker. They've made the money on the way up so can get out of the game. Those who haven't made enough, well that's the hard part.

[Darkzzz_]

My personal opinion is this.

" ................................................I dont care "

[davieG]

Perhaps the question should be do we feel sorry for investment banks! - probably not! In the same way I don't feel sorry for Estate Agent Proprietors when the housing market slumps because they should, like we all should put money aside for a rainy day during the periods of prosperity when they have to do little or nothing in making massively obscene profits.

Obviously the millions of ordinary people that work for these companies do get my sympathy as they end up losing their jobs through the greedy mismanagement at the top.

[James.]

I would lay the blame solely at those bringing the business in and doing the deals, be that traders, investment bankers, whoever. Let's be honest, there was never any loyalty to the company. A city trader or an investment banker should know what they are, and that's turning tricks for whichever bank pays them more. A whore should expect to get ****ed at some point.

At bonus time last year, had Lehman Brothers turned round and said, sorry lads and ladies, we foresee a tough upcoming year. Severely reduced bonuses all round. How many traders and deal-makers would have said, no probs, we understand, let's look to building up the strength of the company balancesheet? How many would have been hitting the phones to every headhunter going looking to move? There is very little loyalty to long-term building of a business. It is a culture very much on short-term emphasis, which has helped to foster the loose deal-making on unsecured credit terms.

Whilst the sub-prime market may have been the start of this, the same problems will filter through into some of the highly leveraged acquisitions we've seen over the past few years. There are a number of companies that look like failing to meet their covenants.

Unfortunately, through all this, it will as you say be the lower level employees who suffer and that is the sh*t part. I guess those traders who made large bonuses, and those investment bankers who were involved, have managed to win at this game of poker. They've made the money on the way up so can get out of the game. Those who haven't made enough, well that's the hard part.

Spot on throughout.

Although don't forget there will be many out there who THOUGHT they had won the game of poker when they received millions of dollars of Lehman stock last Christmas. That particular hand doesn't look as strong now. And there'll be many at other companies looking at a similar fate.

The problem is that it is the actions of a minority that will affect the majority. A trader may have gotten a nice, large bonus on the back of excellent company performance, driven by results in the credit department, even though he may have been nothing to do with any of the lucrative deals. Many people are suffering from this and very few are to blame.

As for the thread sub heading, please there is no need to feel sorry for me. I happen to be at one of the "safer" financial institutions, if there is such a thing.

[Tabou]

Perhaps the question should be do we feel sorry for investment banks! - probably not! In the same way I don't feel sorry for Estate Agent Proprietors when the housing market slumps because they should, like we all should put money aside for a rainy day during the periods of prosperity when they have to do little or nothing in making massively obscene profits.

Obviously the millions of ordinary people that work for these companies do get my sympathy as they end up losing their jobs through the greedy mismanagement at the top.

Absolutely 100% fantstically correct.

[jonno24]

i to be honest dont understand that because the bank has gone bust therefore people are out of work and that makes it ok to take the piss out of them

they have made a mistake and all the employees have to pay the price. The majority of them have more qualifacations than most of us on here and will find it easy to find another job.

they made a mistake and now they have to live with it.

[breadandcheese]

Spot on throughout.

Although don't forget there will be many out there who THOUGHT they had won the game of poker when they received millions of dollars of Lehman stock last Christmas. That particular hand doesn't look as strong now. And there'll be many at other companies looking at a similar fate.

The problem is that it is the actions of a minority that will affect the majority. A trader may have gotten a nice, large bonus on the back of excellent company performance, driven by results in the credit department, even though he may have been nothing to do with any of the lucrative deals. Many people are suffering from this and very few are to blame.

As for the thread sub heading, please there is no need to feel sorry for me. I happen to be at one of the "safer" financial institutions, if there is such a thing.

What do you think the implications will be if AIG can't raise the finance? Am I right in thinking they're the largest insurer of the banks for securities defaults? Obviously the Fed cannot stand by and let it go into admin but what's the mood amongst the city on this?

[BigGibbo]

I feel sorry for any worker that loses there jobs!!!

Yes me too, the people at the top who's fault it is have already made enough money through gambling ours to not give a fook anyway so as always it'll only be the undeserving ones that get shat on!!!

Makes my piss itch!

[BigGibbo]

It's not funny... but this really should have been avoided.

It's so sad but there are big lessons to be learned.

Very true that, but of course they won't be!