I-Bank Pay Potential Remains Stellar & for Some College Grads too

Financial crisis was the worst in a generation — unless you were an American investment banker, Reuters' Breakingviews says. Employment in the securities industry fell by just under 79,000 positions from the peak in June 2008 to last month, according to the Bureau of Labor Statistics. That’s no small number. But it’s actually 14,000 shy of the number of jobs lost during the rout of March 2001 to October 2003 that followed the burst of the dot-com bubble.

We'll Pay You Anyway (BusinessWeek)
RBS may pay out $2 billion in 2009 bonuses for i-bankers. Not too shabby for a bank that’s 84% owned by British taxpayers. Summary via NYT Dealbook below.

Nomura to Almost Triple Salaries for Some University Graduates (Business Week too)

Royal Bank of Scotland (RBS or RBOS?) which is majority-owned by the government after a 2008 bailout, said Thursday it had set aside more money to pay bonuses to its investment banking staff after reducing its losses last year, New York Times reports.

The bank narrowed its 2009 loss to £3.6 billion, or $5.5 billion, last year compared to a £24.3 billion loss in 2008 — one of the biggest in British corporate history. Shares in R.B.S. rose 6.7 percent in London by midday because the loss was smaller than some analysts had expected, and the bank also said loan losses probably peaked. Read More »

Elder Statesmen Urge Tougher Regulation: Doomsday Scenario Laid Out

While the younger generation, visibly led by Goldman CEO Lloyd Blankfein, lobbies Congress against such regulation, their spiritual elders support the reform proposed by Paul Volcker and even more restrictions.

Meanwhile, JPMorgan analysts have outlined a worst-case regulatory scenario. What will happen if all financial regulatory proposals made by governments worldwide are implemented at the same time as the Basel Committee on Banking Supervision changes to capital and liquidity standards? JPM analysts concluded that major banks would see a significant decline in profitability. Deutsche Bank, Credit Suisse, RBS and other European banks would be hurt the most. Article overview from Financial Times - Access via Google News.

George Soros, William Donaldson, John Bogle and other elder statesmen of the financial industry made their fortunes in the 1970s and '80s, when financial institutions faced significantly stricter regulation. These power players are now pushing for a return to tougher rules, going against their younger counterparts. "I am a believer that the system has gone badly awry and needs massive reform," said Bogle, Vanguard founder and former CEO. The New York Times has more from these Street Vets.

Fast or easy ? Not for SEC's Mary Schapiro

As Mary Schapiro took the lead as SEC Chair last year, she vowed to quickly pursue short-selling restrictions and other changes. More than a year later, the SEC has not established additional limits on short selling or made most of the other regulatory changes it had proposed. Today Schapiro defends the SEC's progress: "It can take more time than one might have thought at the outset," she said. "We have to understand the real-life implications of what we're doing, the unintended consequences. We need to digest all the comments and all the economic analysis. And that leads us down a path that sometimes isn't 100% predictable at the beginning."

More on this from the Washington Post.

DC Insiders Say New Financial Regulation May Yet Pass in 2010

According to a new poll, 76% of Washington insiders say financial regulation will head to desk of President Obama in 2010. The House in December passed a wide-ranging package of regulations. Senate Banking Committee Chairman Dodd said Friday bipartisan negotiations on his panel reached an impasse and that he would draft overhaul legislation by the end of February. See more poll results from The Hill and comments posted there.

Meanwhile WSJ reports that Group of Seven (G-7) financial leaders have yet to reach a consensus on how to overhaul regulation of their financial sectors.

G-7 has become overshadowed by the larger Group of 20, which also represents emerging economies such as China, India and Brazil. G-7 financial leaders said they would continue meeting in a more informal fashion that won't include release of cooperative statements.