THE SUNDAY TELEGRAPH: Europe's banks are facing an exodus of staff to US rivals as regulatory and political pressure drives a growing pay divide between financial institutions headquartered on either side of the Atlantic.
Warnings over the divide follow a roller coaster weekend in which Sir John Vickers, the banking commission chief, said Britain's lenders could be broken up and talks between finance chiefs and the Treasury over bonuses and lending targets stalled.
Headhunters have warned that City staff at some of Europe's biggest banks are "fed up" and that they expect a wave of applications after this year's bonus round. City-based US banks and small boutique firms are expected to be the main beneficiaries.
Leading US banks from Goldman Sachs to JP Morgan last week handed bonuses to London based staff, with significant cash elements, while bankers at European rivals face smaller bonuses paid largely in deferred shares.
"A number of European banks have issues," said Stéphane Rambosson, managing partner of search firm Veni Partners. "They have been operating on the goodwill of their staff for the last couple of years, but people are getting fed up."
Credit Suisse has already said it intends to defer bonuses for more bankers this year, with much of the payouts in shares rather than cash, and other European and UK players are expected to follow.
"European banks are increasingly concerned that regulation is moving against them, allowing US banks to be more competitive in both hiring and paying staff," said Piers Benbow, managing partner of Eden Search. Banks set for staff exodus to US rivals over pay rules >>> Jonathan Sibun and Harry Wilson | Sunday, January 23, 2011
