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NEW YORK: So much for conserving cash. After firing staff by the thousands during the global financial crisis, big Wall Street banks are jump-starting hiring in response to a resurgence in bond issuance and trading.
The crisis hit financial companies hard, with New York firms axing around 195,700 jobs since August 2007, according to planned layoff announcements tracked by outplacement firm Challenger, Gray & Christmas Inc.
But financial firms have started re-hiring staff in the first nine months of this year with some 14,000 planned and Citigroup, Wells Fargo and Standard Chartered are among those adding staff selectively, Challenger data indicate.
Big banks are scrambling to beef up bond operations after smaller boutique firms snatched market share in the aftermath of the 2008 market meltdown.
"Wall Street tends to over hire in good times and over fire in bad times. It feels like that has happened once again," said Kurt Harrison, a senior member in the financial services division of global search firm Russell Reynolds Associates.
The U.S. financial sector is showing hints of recovery faster than the broader U.S. economy, where hundreds of thousands of workers continue to lose jobs each month, pushing unemployment to 9.8 percent in September.
On fixed-income desks, U.S. banks have been adding staff to cater to a rebound in investor interest in corporate and mortgage bonds and a huge increase in government debt issuance, headhunters and analysts say.
Driving the recovery are investors who only a year ago hid in safe haven Treasury bills and shunned risk.
In recent months they have plowed funds into riskier, housing-related bonds, corporate bonds and stocks.
U.S. investment grade corporate bond issuance rebounded to $552 billion in the first nine months of 2009 versus $576 billion in the year-earlier period, according to Thomson Reuters data.
In the third quarter, U.S. investment grade issuance surged to $161 billion from nearly $73 billion in the same quarter last year, Thomson Reuters data shows.
BIG BANKS, BOUTIQUES AND BONUSES
Big banks have a lot of catching up to do in response to the market improvement. Earlier this year, many still dependent on government bailout money were restricted from paying enough to attract top bond analysts, traders and sales people.
"The larger firms lost ground, had the wind taken out of their sails and made some big job cuts in their groups," said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
Now that many banks are repaying bailout funds and issuing their own bonds without government guarantee, the window of opportunity for smaller firms may be closing.
Most of the hiring has been concentrated in fixed-income, currency and commodities, but equity trading has garnered interest because of the rebound in stocks, said Peter Gonye, co-leader in search firm Spencer Stuart's private equity practice in North America.
In the aftermath of late 2008's market tumult, smaller private boutiques sensed an opportunity to take advantage of dislocated bond markets, building up fixed income departments to make a grab for market share.
"The credit crisis in many respects accelerated our opportunities," said Peter Tarrant, head of business development with New York-based broker dealer BTIG which started a fixed-income group in February and now employs some 60 people in that area.
"In the first quarter there was a clear, unique opportunity to hire a lot of available talent," Tarrant said.
However, the rebound in markets has emboldened hiring managers at larger firms.
Since the summer, large U.S. banks have tried to stop the smaller players eating their lunch. Goldman Sachs said in September it had started to hire 200 people for its asset management business. Nomura, which acquired Lehman Brothers units in Asia and Europe is making a big push to hire staff in the United States.
To combat the boutiques, big banks are countering with bonuses that, only a year after the nadir of the global financial crisis, are about three quarters their level in the 2006 to 2007 boom years, Harrison estimates.
"The landscape is now beginning to shift," said Harrison. "It feels like the pendulum swung as far as it could toward the smaller firms and now is beginning to swing back the other way."
Wall Street rehires as bonds bounce back- International Business-News-The Economic Times
The crisis hit financial companies hard, with New York firms axing around 195,700 jobs since August 2007, according to planned layoff announcements tracked by outplacement firm Challenger, Gray & Christmas Inc.
But financial firms have started re-hiring staff in the first nine months of this year with some 14,000 planned and Citigroup, Wells Fargo and Standard Chartered are among those adding staff selectively, Challenger data indicate.
Big banks are scrambling to beef up bond operations after smaller boutique firms snatched market share in the aftermath of the 2008 market meltdown.
"Wall Street tends to over hire in good times and over fire in bad times. It feels like that has happened once again," said Kurt Harrison, a senior member in the financial services division of global search firm Russell Reynolds Associates.
The U.S. financial sector is showing hints of recovery faster than the broader U.S. economy, where hundreds of thousands of workers continue to lose jobs each month, pushing unemployment to 9.8 percent in September.
On fixed-income desks, U.S. banks have been adding staff to cater to a rebound in investor interest in corporate and mortgage bonds and a huge increase in government debt issuance, headhunters and analysts say.
Driving the recovery are investors who only a year ago hid in safe haven Treasury bills and shunned risk.
In recent months they have plowed funds into riskier, housing-related bonds, corporate bonds and stocks.
U.S. investment grade corporate bond issuance rebounded to $552 billion in the first nine months of 2009 versus $576 billion in the year-earlier period, according to Thomson Reuters data.
In the third quarter, U.S. investment grade issuance surged to $161 billion from nearly $73 billion in the same quarter last year, Thomson Reuters data shows.
BIG BANKS, BOUTIQUES AND BONUSES
Big banks have a lot of catching up to do in response to the market improvement. Earlier this year, many still dependent on government bailout money were restricted from paying enough to attract top bond analysts, traders and sales people.
"The larger firms lost ground, had the wind taken out of their sails and made some big job cuts in their groups," said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
Now that many banks are repaying bailout funds and issuing their own bonds without government guarantee, the window of opportunity for smaller firms may be closing.
Most of the hiring has been concentrated in fixed-income, currency and commodities, but equity trading has garnered interest because of the rebound in stocks, said Peter Gonye, co-leader in search firm Spencer Stuart's private equity practice in North America.
In the aftermath of late 2008's market tumult, smaller private boutiques sensed an opportunity to take advantage of dislocated bond markets, building up fixed income departments to make a grab for market share.
"The credit crisis in many respects accelerated our opportunities," said Peter Tarrant, head of business development with New York-based broker dealer BTIG which started a fixed-income group in February and now employs some 60 people in that area.
"In the first quarter there was a clear, unique opportunity to hire a lot of available talent," Tarrant said.
However, the rebound in markets has emboldened hiring managers at larger firms.
Since the summer, large U.S. banks have tried to stop the smaller players eating their lunch. Goldman Sachs said in September it had started to hire 200 people for its asset management business. Nomura, which acquired Lehman Brothers units in Asia and Europe is making a big push to hire staff in the United States.
To combat the boutiques, big banks are countering with bonuses that, only a year after the nadir of the global financial crisis, are about three quarters their level in the 2006 to 2007 boom years, Harrison estimates.
"The landscape is now beginning to shift," said Harrison. "It feels like the pendulum swung as far as it could toward the smaller firms and now is beginning to swing back the other way."
Wall Street rehires as bonds bounce back- International Business-News-The Economic Times