Gauging how many derivatives staff lost their jobs in the financial crisis and what effect that had on pay is not easy. Some segments of the market have remained bullish, however, as Hugo Cox discovers.
Conventional wisdom on the effect of the financial crisis on
pay in the derivatives market runs something like this.
As far back as Bear Stearns’ absorption by JP
Morgan in March 2008, remuneration packages began to weaken.
The flurry of redundancies that followed the collapse of Lehman
Brothers in September 2008 affected all the major investment
banks, if not necessarily in derivatives (JP Morgan had
announced cuts even before it acquired Bear Stearns). Continued
rounds of belt tightening led to significant decreases in basic
pay being offered to candidates; the disastrous performance of
the leading investment banks caused bonuses to shrivel.
"The effect was most striking for new hires who lacked
the negotiating leverage of an existing position," says Rob
Strichartz, managing director of Optimal Financial Recruitment,
a US consultancy specialising in the global treasury and
capital market industries.
Talking to derivatives professionals and headhunters, it
seems that this familiar tale is accurate in some respects.
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