Remember when we wondered if stricter regulations and restrictions on executive compensation would spark an exodus of talented bankers from top Wall Street firms? Turns out it’s happening, and it’s probably not a bad thing. [%comments]
Wall Street’s Brain Drain
TAGS: Wall Street
and 
. You can also watch it on 
I hate to join in on the financial industry-bashing, but let’s be frank, it’s hard to see the US having had to buy ~40% of Citi, etc, etc, and still believe that all the talented superstars were doing something good… I know, the system works against them, blah blah, but end result is that they weren’t doing anything good for society in their position.
Moreover, the article makes it seem like what’s happening is excellent. The big banks, i.e. the ones that are too big to fail, are trying to be more stable so the risk-takers are going to smaller institutions, i.e. ones that can fail. Seems like win-win to me…
So… in other words, this is good because they can do less damage at smaller firms? Good. Let’s pay them more.
Right. We need more lawyers!
Weird… Just blogged about exactly the same topic yesterday:
http://anamoure.blogspot.com/2009/04/ana-moure-doctor-am-i-propet.html
Geoff, – hope the articles I quoted clarify your questions.
Talanted people on WS aren’t salesmen – they are traders and high-end analysts able to turn a smaller portfolio into a much more expendive one, while not significsntly affecting the risk profile.
This is the true talent. People who have a proven record of doing it (and are very smart) will have no problem leaving to the proprietary shops/money management companies.
Is it really a brain-drain or systematic employment change? Great Recession, fall of investment banks, and uncertain future for hedge funds makes it difficult to have a secure employment…
For a different perspective on the topic, see Andy Borowitz’s latest column regarding the effect of Wall Street salary caps.
http://www.borowitzreport.com/index.aspx
Very slightly NSFW – language.
If the same amount of brain power was put into actually manufacturing items versus figuring out wacky ways to capture tax credits, the country would be better off.