The world financial system has been shaken to its core and turned inside out in the past month says columnist William Wright, in a recent article in Dow Jones Financial News online. Wright notes 10 ways he thinks the investment banking industry has changed forever, and what it means for those seeking jobs in investment banking over the next five years. His observations include:
1. Expect to see returns on equity only marginally higher than those of a regulated utility; ROEs will fall to even single digits as leverage comes down.
2. Large numbers of highly numerate investment bankers will turn to other sectors of the financial services industry for work, creating a shortage of experienced executives in investment banking in about seven years.
3. Regulators will soon start poaching top financial talent from investment banks to deal with the complexities of modern regulations.
4. Bond traders and bond salesmen will once again become 1980s style Masters of the Universe due to a flood of government bond issuance to pay for the bailout of the banking industry and as investors around the world toward more secure assets.