THE CEO OF a leading investment bank recently offered Euromoney a telling judgement on the state of the sector. "There is now more talent outside the industry than inside it," he noted, reflecting on the exodus from the big banks of some of their brightest and most successful people.
After a decade-long boom, the crash and retrenchment plus the exposure of wrongdoings and moral failure have created a revulsion against the wholesale financial services industry among its own.
Among the many tens of thousands quitting or being forced out from the big banks, many have squirrelled away the private wealth to found their own firms. New technology makes setting up easier than ever.
Previous market downturns have spawned new boutiques, but never before on this scale. The whole industry is re-inventing itself. In part this process marks a return to the old private-partnership model of investment banking. There are also new themes this time around.
The increasing specialization of financial markets makes it possible for those with a particular skill to thrive outside a large organization. Big banks, with their post-merger politics and their bureaucracy, can often stifle their best talent.