Today a Bloomberg article caught our eye:
Billion-Dollar Traders Quit Wall Street for Hedge Funds
It contains the shocking revelation that some of the most sucessful bond traders are beginning to offer their talents to firms who are best able to compensate them.
Not surprisingly, the firms who are best able to compensate them are those who do not suffer the burden of regulation which has been thrust upon banks.
Wall Street’s biggest banks have lost almost two dozen of their most-profitable credit traders in the past 13 months as regulators limit the kind of risk-taking that amplified the housing crisis four years ago. As banks slash or defer pay and reduce the amount they’re willing to wager, the traders are seeing better opportunities at hedge funds and investment firms that seek to profit in markets lenders are retreating from.
“People who were contributing quite a bit to the overall profitability of the firms are forced to move on,” said Doug Shaener, managing partner at Quest Group, a New York-based executive search consulting firm that specializes in financial services. “You’re seeing individuals looking to go to places where they obviously aren’t as regulated, where they don’t have as many restrictions in terms of their trading.”
Yes, the Deer bond traders are leaving the overcrowded, cordoned off meadows and leaping towards greener pastures. It is yet another symptom of the Subtle change from Principles to Rules as it plays out in the finance industry.
Please give it a read and let us know how this disturbing phenomenon is playing out in your corner of the world.