London's stockbrokers: The City that never shrinks

The share-trading business has defied predictions of a slump—so farCITY folk never tire of saying that London’s share-trading business is too crowded. Many saw the financial crisis as a reckoning. Bank failures would take out capacity, jobs would go and bonuses would shrink. Yet fund managers’ inboxes remain stuffed with brokers’ research notes; calls from salesmen are no less frequent; pay packets are just as fat. What happened? The answer is that new firms replaced old ones. Nomura, a Japanese bank, snapped up Lehman Brothers’ European stockbroking operation. Barclays bought the bust firm’s American equities arm and then recruited analysts, salespeople and traders in London to build from scratch a European business to complement it. Rivals blame this hiring spree for pushing up City pay even in the aftermath of a huge banking crisis. Smaller outfits saw the crisis as an opportunity to bulk up by hiring experienced staff from struggling or failing banks. Even now biggish banks, such as Royal Bank of Canada, are expanding their equities businesses. ...

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