It’s no secret that after a summer of scandals — LIBOR manipulation, the JP Morgan trading loss etc. — Wall Street is going into the fall with its nose a bit bloodied.
And so, The Telegraph reports, since the Street can’t show the world its best face (which it usually uses to attract an army of hungry young recruits), it’s going to do the next best thing to lure young people into the financial services industry — give them more money.
According to The Telegraph’s report, at least in London, first year banking base salaries are up 5% to between $70,000 and $80,000. The reason is simple: Banks are trying to make recruits forget about all the scandals and the industry’s bad reputation.
Jon Terry, partner at PricewaterhouseCoopers who advises all the top banks on pay levels, said: “There is no doubt that ‘banker bashing’ and the scandals at the banks are impacting graduate decisions about going into the City. The importance of reputation seems to have gone up tremendously. Investment banks are generally paying around 5pc more this year… Some of the reputational damage – such as money laundering – has happened in other parts of banking but in the eyes of graduates, as with the wider public, it’s seen as investment banking, not banking at large.” He added: “Money is only part of the equation for grads – they don’t want to go to a party and say they work for a bank.”