End of the Road for the banker

Source: Cagle Cartoons

Every decade has its ideal and lucrative job that almost everyone is clamouring for. The most recent “IT” job was being a banker (investment banker, personal banker, corporate banker, etc).

The sub-prime ended that.

Before the “banker” was the “technopreneur” or the I.T. professional. The dot-com bubble starting from 1995 created huge demand for I.T. professionals.

The dot-com bubble burst in 2001 ended that.

And before the “technopreneur” was the “engineers”. The top paying job for a fresh graduate in Singapore is a Chemical Engineer in the 1980s (excluding doctors and lawyers).

The oversupply of engineers (and rise of other lucrative industries) ended that.

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This afternoon, I met an old JC friend of mine, Brandon. He is working as a corporate banker with a large french bank in London. We were catching up in Starbucks and the topic of the UK job market came into discussion. He commented that the job market is very bad given that financial industry is affected by the sub-prime mess and UK is the largest financial centre in the world (services composed 73% of UK’s GDP in which financial intermediation is a significant contributor).

His company recently axed 800 job worldwide and he reckoned there is a high possibility of a second round of retrenchment. In addition, the redundancy package (retrenchment benefits) is no long what it used to be, he said. The days of attractive redundancy packages are over.

He believe the international financial industry is going to change – drastically, and that the dreams of retiring at 30 or 40 as a banker are over.

The “IT” job title will go to another new contender.

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A couple of months back, I met up with Frank Starmer, associate dean and professor at Duke-NUS graduate medical school. He was offloading some canon equipment and I got a good deal for one of the items.

During that time, the US$700 billion bailout package was just announced by Henry Paulson to rescue the battered financial institutions. So I asked Frank (he’s American) what is his opinion on efficacy of the bailout package in dealing with the crisis.

He replied that what will be interesting is not whether the bailout package is going to help so-and-so. What is interesting will be the resultant regulation of the financial industry to prevent a similar crisis from happening again.

He is convinced that regulation will be tighter and financial institutions will be made more accountable for their actions.

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The free-market group will most likely be resistant to the increased regulation.  But as Obama said in his inauguration speech last Tuesday:

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched.

But this crisis has reminded us that without a watchful eye, the market can spin out of control. The nation cannot prosper long when it favors only the prosperous.

The key is a balance of regulation and free-market operations. One thing is quite certain, the once-lucrative banking job has already lose its lustre as the top job of this decade.