When this cycle ends and the embers are being raked over, I predict that senior banking executives will be found to have presided over serious failures of governance. At the bank I work for, the hand on the tiller is light, and I can see the same light touch elsewhere.
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Cronyism is rife here. This is a Europe-based bank, but we’re spending a fortune on bankers in America. We hired a few senior Americans, and they’ve been hiring their friends on enormous packages. I appreciate that bankers are paid more in New York, but our spending is not justified. We’re hiring people who are experts in selling themselves, but in very little else.
In normal times, senior executives would scrutinize this. The board should then provide another level of checks and balances. But there is a culture of fear here. No one is prepared to speak out against these Americans, and senior management and the board seem oblivious to what’s really going on.
The new recruits will deplete the bonus pool for those of us that do make money. They’re adding inertia to the organization that will become apparent in time. There’s becoming an inverse correlation between seniority and talent: talented people can see what’s going on, and they get out as soon as they can; the most senior people are in on the game.
It’s bad for morale. Incumbent bankers who’ve been carrying this franchise know what’s going on and are demotivated. People want to leave, but opportunities in this market are few. In the meantime, this place has become rotten. Anyone who speaks up is retaliated against. Feedback is non-existent.
Connor Palmer is the pseudonym of an MD
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