SPIEGEL ONLINE INTERNATIONAL: For decades, investment bankers have held the key to untold riches -- but now they're being laid off by the tens of thousands. As the crisis forces the industry to search for a new identity, is it ready to mend its ways?
The suicide victims chose a location with symbolic significance. Last fall, only a few weeks apart, a businesswoman and a banker went to the Coq d'Argent, an upscale restaurant and hot spot in the world of London high finance, located on the top floor of a shopping complex, to end their lives.
The woman put down her purse and jumped from the restaurant's cozy rooftop terrace. The banker, an investment specialist, jumped into the building's atrium around lunchtime.
The "City," the casual term the financial center uses in reference to itself, was shocked. The suicides are the most glaring expression of an apocalyptic mood that seems to have gripped all of London. Hospitals are reporting a high incidence of patients with alcohol problems, while top restaurants are fighting for every customer.
The crisis has struck at the heart of the financial center. In 2012, banks began to downsize their investment banking activities. For years, the area had been seen as a playground for those seeking instant riches and guaranteed success, and it provided tens of thousands with sometimes exorbitant incomes.
October 30 would become a horrific day for the financial district after the Swiss bank UBS announced that it was slashing 10,000 jobs in the sector. On one morning alone, the bank's London office let hordes of bankers go. Some were intercepted at the entrance, still carrying their coffee in to-go cups, only to be shown the door a short time later with a piece of paper filled with instructions.
All he felt was hate, says a 51-year-old who was among those affected by the recent layoffs. For him and others like him, the chances of finding a new job are slim. The competition is also doing its utmost to downsize. Morgan Stanley plans to lay off 1,600 employees in the coming weeks, Lloyds is cutting as many as 15,000 jobs worldwide, and Deutsche Bank has just eliminated 1,500 jobs in its investment banking division.
An era seems to be coming to an end, the era of an industry that led us to believe that what it did was useful. In reality, though, it was lining its pockets by conducting more and more reckless transactions and involving itself in increasingly insane deals and products. Senior executives say the business is merely shrinking to a healthy level and characterize it as something like a catharsis.
As former investment bankers search for new identities, arrogance is being replaced with humility. It's important to "improve the way we operate as an organisation," Antony Jenkins, the new CEO of the major British bank Barclays, wrote in a memo to employees. Anshu Jain, co-CEO of Deutsche Bank and the former head of its investment banking division, has promised "cultural change." » | Martin Hesse, Thomas Schulz, Christoph Scheuermann and Anne Seith | Friday, January 18, 2013