How will this change things?

There's been talk about how once the dust settles, big changes will be in store for how the remaing banks will operate in the future. Just what sort of changes are could we be facing as an industry? Are large bonuses a thing of the past? Will new risk management measures reduce the amount of trading and asset classes banks will be involved in? Any thoughts?

4 Comments
 

I think it'll be a long time, if ever, before the swagger returns to Wall Street. The 'Masters of the Universe' image has been shattered. I think comp, as well as the number of people that are able to get into high finance, will be down for a while...

If it does come back, it will take time.

  • Capt K
- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 
Best Response

I think the number of people that will be interested in finance will also fall by a good deal. I'm honestly considering other opportunities right now. As for bonuses, I'm not sure what things are going to be like. They will definitely be a lot lower than usual. Also, I think senior management will start demanding for a larger chunk of their compensation to be in cash and not stock. I honestly think the large number of asset classes makes it far too complicated to bring under one particular firm. I think the system works better if you have many specialized firms instead of a big firm like lehman or Merrill, that way, if anything crashes, the ripple effect will be minimal. I don't think consolidation is the way to go. I also think banking should really be split away from trading and structuring. The bankers really didn't have much to do with the risky exposure to bad assets.

 

I think the number of people that will be interested in finance will also fall by a good deal. I'm honestly considering other opportunities right now. As for bonuses, I'm not sure what things are going to be like. They will definitely be a lot lower than usual. Also, I think senior management will start demanding for a larger chunk of their compensation to be in cash and not stock. I honestly think the large number of asset classes makes it far too complicated to bring under one particular firm. I think the system works better if you have many specialized firms instead of a big firm like lehman or Merrill, that way, if anything crashes, the ripple effect will be minimal. I don't think consolidation is the way to go. I also think banking should really be split away from trading and structuring. The bankers really didn't have much to do with the risky exposure to bad assets.

 

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