Morning Coffee: Staff shortages oblige senior bankers to do juniors' work. Sorry story of imprisoned Deutsche Bank trader

Following on from yesterday's story about the brutal email sent to analysts by a vice president (VP) fed up with their failure to follow his instructions, Business Insider has some context explaining why VPs might be feeling so upset. 

In 2021's 'red hot market' for deals, BI says desperate banks have been trying to scoop up new junior banker talent wherever they can find it. In the U.S. this includes corporate finance attorneys; in the U.K. it means people like trainee accountants. Unfortunately this new talent has a "pretty steep learning curve," according to one analyst, and this is putting additional pressure on existing staff who actually know what they're doing.

As a result, BI says mid-ranking and senior bankers who thought their days in the bullpen were done are back helping with execution work. "I have a deal right now where my VP offered to get into PowerPoint and work through changes on the deck, because we just didn't have enough people to work on the deck," said one experienced analyst. A headhunter said he'd heard of MDs returning to the office and doing the sort of "heavy lifting" for deal execution that they haven't had to do for a decade since they were VPs themselves.  

It could get worse before it gets better. This year's intern classes and the incoming graduate classes aren't really large enough to meet the demand for additional juniors - and they'll still need to be trained. Existing junior staff are exhausted and are expected to resign en masse after August bonuses. The only good news is that the senior bankers helping to execute deals have less time to pitch for new ones, so the deal pipeline may isn't being refilled...

Separately, a former Deutsche Bank trader is being imprisoned - and not at Deutsche Bank's new Columbus Circle building by DB executives in hard hats looking for photo opportunities. James Vorley, a 41 year-old British DB trader, is going to a proper prison for a year and a day after being convicted of manipulating gold and silver prices by a jury in Chicago.  The judge seems to have decided to make an example of him in order to communicate the "message that if you attempt to manipulate the market, the price you will pay includes prison." Vorley joined DB out of school and argued that he learned on the job that, "bluffing and misdirection" were the perfectly valid trading techniques. His ex-DB colleagues wrote in pleading for leniency, claiming that Vorley was ethical and often sought advice from compliance. Family members wrote in saying that a prison sentence would damage his children because Vorley had become their primary carer while his wife worked.  The judge was not in a lenient mood.

Meanwhile…

Blackstone is now recruiting from 44 universities instead of 9 and it requires recruiters for more experienced positions to put forward at least two women and two people from ethnic minorities on the short list. (Financial News) 

Goldman Sachs is trying to shorten its hiring process and might be about to require that candidates undertake fewer interviews. (Business Insider)

BNP Paribas has big plans for its flow equity derivatives business. “We have been punching below our weight in flow. We know where we want to grow and how we want to do it.” (IFRE)

Plenty of people are already back in the office in Hong Kong. Morgan Stanley has more than 70% of Hong Kong people back. Credit Suisse has 60-70%. Citi has 75%. JPM is working up to 75% in the coming weeks. (Yahoo Finance)

Andreas Loetscher, the former head of accounting at Deutsche Bank (who’s temporarily become an advisor on audit matters at the bank instead) is trying to prevent a German parliamentary committee from naming him in a report into the Wirecard scandal. He was the former EY partner in charge of Wirecard audits. (Financial Times)

Robert Gelnaw, head of debt capital markets for North America, Lex Malas, head of advisory and investment banking coverage for the Americas, Jim Kelly, head of corporate banking in North America, and Duncan Caird, co-head of real assets and structured finance Americas, are all leaving HSBC. (Bloomberg)

Goldman Sachs is opening its transaction bank in the UK. This is why it's so excited about it: "The size of that wallet in the US and globally is bigger than for our traditional investment banking products. In the next decades there is a revenue opportunity measured in multiple billions for the firm, if we get this right.” (Financial Times)

Deutsche Bank decided it wants to be back in the payments business. (WSJ) 

Central bankers who have been exposed to disasters in early life tend to manage inflation in a more conservative way in the very-short-run. (Wiley)

Steve Cohen's impressive trading technique during the dotcom crash. 'Steve did something I had never seen him do before: he left the desk and went downstairs to have lunch with his family' (ZeroHedge)

Dating app Bumble is giving its people an entire week of paid leave to help them recover from COVID burnout. (Bloomberg)

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