Investment Bank == Bank Holding Company
Goldman and Morgan Stanley have become bank holding companies – the investment bank model is broken! Does this mean we’ll soon see Goldman retail banks appearing on our street corner ready to accept our salary cheques? Mr Mack (the knife) appears to be going that way with “build our bank services“! I guess it won’t be long before I can open a Goldman online bank account, in a similar way to JPMorgan Chase – which should at least generate more revenue for the contracts who got burn in the Lehman’s fall.
I see the BBC is reporting that the FSA is considering clamping down on bonus payments. What other business would tolerated the quality of software that is currently generated by short term bonus driven employees? Where else can you effectively run a production application that deal in millions of dollars per hour/day from a desktop underneath a traders desk, with no backup, and in some cases no source control system, and no idea of where the source code for the binaries exist?
Don’t get me wrong, not all software is of low quality, but it is truely amazing to watch the decision making process unfold within a bank, knowing that the decision wouldn’t have been made if it wasn’t for the deadline of yearly bonus’s.
haha, in which bank do you work? I will avoid it in the future
It will be interesting to see how long it will be before the new bank holding companies insist that all of their employees get their salaries paid in to an account held at the bank. With bonus payments made in stock/options + current accounts in the new banks it will be interesting to see how the employees of the new bank view their risk positions.
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I hear you with regard to the astonishing malpractices within front office dev teams, but I hasten to add that this is not wholly symptomatic of bonus culture.
The demands put upon fire fighting dev teams are because of the speed in which markets and opportunities move, and less because of the short-termism of the dealing desk.
Personally, my feeling is that the cultural arrogance of front office vs. back office roles in banks means that the profit-centres will always be able to veto any expert guidance from the lower departments.
It’s this same arrogance which has brought the entire system to its knees. I can imagine Devil’s Advocate II – but with Keanu playing an Avaricious young banker? At the end will again be Vanity: they believed their own b.s.