Gauging how many derivatives staff lost their jobs in the financial crisis, and what effect that had on pay is not easy, as many firms do not give separate figures. Hugo Cox discovers that while there were certainly some redundancies and depressed pay, some segments of the market have remained bullish. Specialists are even forecasting a big rise in bonuses for this quarter.
Conventional wisdom on the effect of the financial crisis on pay in the derivatives market runs something like this.
As far back as Bear Stearns’ absorption by JP Morgan in March 2008, remuneration packages began to weaken. The flurry of redundancies that followed the collapse of Lehman Brothers in September 2008 affected all the major investment banks, if not necessarily in derivatives (JP Morgan had announced cuts even before it acquired Bear Stearns). Continued rounds of belt tightening led to significant decreases in basic pay being offered...