...according to Bloomberg
I note with some amusement that Bloomberg didn’t contact P&D about this, perhaps we aren’t high profile enough ?
It's plausible that SG as a knee jerk reaction stops this sort of move, others may copy but realisitically given the current market it will make relatively little difference. In my Register Article
I explained how people can over time acquire more access than is good for the firm, but that is a process issue, and frankly one that is not hard to fix.
M.Kerviel's understanding of systems and processes meant he could do serious harm, but the flipside is that people like him do so much good. This is because very few, if any banks work the way it says on the Visio diagrams put up by business analysts.
Lots of quick fixes, chasing up, and adjustments need to be made, and people like M. Kerviel have a critical role in getting things done. Probably the #1 reason that good experienced hires give to me for wanting to move is that they feel the processes and systems in their firm are getting in the way.
If SG et al stick to this policy, then these valuable people will start to walk, and in the meantime they will make less money for the firm and themselves. Also they will use the full political power they have to try and get “exceptions” made, and/or kill the policy.
Of the workers in this forum I guess 40-50% are mid/back office, risk, or IT. I’d bet 80% were told when they started that if they worked hard and well, there was a job in front office or trading there. So what do you do if work hard, work well, and work to the position you should get, but they “policy” says you can’t. You send your CV to me, that’s what. (Dominic@PaulDominic.com) Or they a send it somewhere else, but we all know that when you see the plateau for your career, that’s when you start looking at the job ads.
Word will get around and people will be reluctant to join firms that act this way, who will of course by this time be making less money.
The article implies that money for Mid/Back office will go up because of this. Being one of the hated anglo-saxon banking types, that makes sense to me. But look at the trade they are making. The chance of getting to the front office costs nothing, but has serious value to staff. Also these are not the best market conditions to increase costs, especially if the goal is in effect to make the trading operation less efficient.
Just because such a policy in harmful if carried out for any length of time, doesn’t mean that it won’t happen in some places, and persist long enough to do real damage.