Wall Street is shrinking.
The number of investment bankers, traders, researchers, sales people and other frontline producers fell for the fourth straight year as tighter regulations and sluggish markets continued to pinch the world’s 10 largest investment banks, a new study found.
The study, by London-based consulting firm Coalition Ltd., found that the number of so-called “front-line producers” ticked down 1% in 2014 to 51,600 from a year earlier. Employment on Wall Street (and at the big European banks) is down 15% from 60,800 in 2009.
The falling employment is part of a broader transformation of Wall Street and the investment banking business generally after the financial crisis of 2008, which ushered in an era of tighter regulation and higher capital requirements and drastically reduced the banks’ once-roaring business of trading stocks, bonds and other instruments.
The biggest hit, the Coalition survey said, has been to the fixed-income, or bond, business, which before the crisis provided an outsized portion of revenue and profit as banks turned out trillions of dollars of mortgage-backed securities and related products, a process known as securitization.
Fixed-income revenue fell 7% to $69.4 billion in 2014 from the previous year and have fallen even more dramatically, by half, since 2009, when fixed income produced revenue of $141.6 billion. Securitization revenue has fallen from $31.2 billion to $15.6 billion since 2009. Overall fixed-income employment, meanwhile, has fallen from 23,500 in 2009 to 17,500 in 2014.
The survey this year includes the investment banking operations at Bank of America Corp.'s Merrill Lynch unit, Barclays Plc, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JP Morgan Chase & Co., Royal Bank of Scotland Group Plc., and UBS AG.
Notably, overall revenue at the operations were down 6% to $150 billion in 2014 from a year earlier and down more than 32% from 2009 revenues of $223.1 billion.