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Morning Coffee: Ominous signs that big banking redundancies are coming in mid-2018. Over-excitable crypto-enthusiasts

As U.S. banks prepare to announce their fourth quarter results in the coming week, an unwanted spectre is waiting in the wings: job cuts. They may make their entrance towards the end of the second quarter.

Nomura has become the first bank to articulate the possibility of cuts to come. In an interview with theFinancial Times, Koji Nagai, Nomura’s president, said the bank is contemplating completely restructuring its research operations in the U.S. in response to the impact of MiFID II in Europe.

Nagai even spells out the implications of the proposed “restructuring.” – “We already stopped providing research services in Europe. Probably there is no advantage in providing the service in the U.S.,” he tells the FT.

It’s not clear how many researchers Nomura employs in the U.S., but they cover a total of 200 companies, suggesting the team is not insignificant. Nor is it clear when the cuts will start – but sometime before Nomura pays its bonuses in May seems likely. A research director at another “leading bank” told the FT that he too is planning cuts, but that they will not come until  later in the year, when the bank better understands how investors’ behaviour will change under MiFID.

The clear danger is that Nomura will not be the only bank making global cuts to research – and that the cuts will spread beyond research to sales and sales trading, which also stand to be affected by the new rules. 2018 could yet turn out to be a painful year for equities businesses.

Separately, you may want to avert your eyes from the crypto-maniacs claiming to make millions. TheNew York Times has poked around in the crypto scene and found inordinately rich 26 year-olds who say things like, ““It’s the entire world reorganizing itself…We could get rid of our armies because for the first time you’ll have people saying, ‘I want to vote for a global order.’ It’s the internet waking up — it’s the internet grabbing its pitchfork. That’s the blockchain.” There’s also somewhere called Crypto Castle, which houses eight crypto people who eat Cheez-Its and Nutella, and which has a ‘stripper pole’ in one of the rooms. Revolutionary.


John Cryan says Deutsche Bank will only create “several hundred” jobs in the EU outside London to begin with. “The 4,000 number that comes up again and again is much too high.” (The Times)

Like J.P. Morgan, Goldman Sachs took a loss related to Steinhoff Holdings in the fourth quarter. (Fin24) 

How trading jobs lost their shine. “I think you can expect another slow year in 2018.”  (New York Times) 

Henderson fund managers: “We both have economics backgrounds, which have been completely useless for analysing the world.” (Telegraph) 

Tim Cook: “You have to find the intersection of doing something you’re passionate about and at the same time something that is in the service of other people,” Cook said, adding that “if you don’t find that intersection, you’re not going to be very happy in life.” (Fortune) 

Ray Dalio: ““We’re headed for a world where you’re either going to be able to write algorithms and speak that language or be replaced by algorithms.” (Financial Times) 

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