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Preparing a list of questions to ask hiring managers is advisable when interviewing for any role. It shows you’re prepared and invested. But when it comes to investment banking, your questions need to be particularly targeted and industry-focused. The key is to ask questions that simultaneously act as statements about your base industry and cultural knowledge. Plus, you can find out who’s really sitting on the other side of the table when it comes to actual work.

Ask about recent deals the bank has been involved in

And not generically; mention a specific deal to show you’re following the company and team in question, said a former investment banking VP at Deutsche Bank. Inquire about whether they were personally involved, she said.

“Asking about a group’s recent deal in the interview process reinforces an individual’s eagerness and enthusiasm,” said Joanna Lee, VP of human resources at J.P. Morgan in New York.

Ask questions that show your knowledge of the overall market

Talk about a specific industry trend, then ask how it is affecting the firm’s investment banking unit. One example provided by the Deutsche Bank source: “The debt markets continue to be on fire, do you think they will slow down anytime soon and if so what implications do you think that will have for your business?”

You can also inquire about where they see the market heading,” said Chris Mitra-Hall, director at London-based Burlington Wellesley Search. “In ECM [equity capital markets], for example, do they think it will be more about IPOs; rights-issues; accelerated book builds this year and next.”

Ask them why they joined the firm

It’s a subtle way to coerce them into selling you on the job and opening up more about the bank, Mitra-Hall said. You can ask them about why they chose investment banking over private equity firms, hedge funds and venture capitalists, he said. This will give you an opportunity to state that you are interested in a career in banking and do not see it as a path to the buy-side – a common fear among hiring managers in banking.

Ask everything and anything about the person across the table

When not talking about yourself, make the interview about them. “Bankers love to hear themselves speak,” said Adam Zoia, founder of Wall Street recruiter Glocap. Inquire about their career progression, what it was like working for a particular CEO and their opinion on topical industry news.

Investment bankers “are egotistical, so focusing questions on them is always a good idea,” added the DB banker.

What you shouldn’t by asking

Don’t ask banal or clichéd questions. Hiring managers at investment banks hate wasting their time. “What is the typical work day of an analyst?” is about the worst question you can ask, said Mitra-Hall.

At the junior level, there’s also no need to ask about the potential for career growth. Everyone knows the hierarchy. And above all else, never ask about work/life balance. “There isn’t one,” said the former Deutsche VP matter-of-factly. Moreover, it will leave questions in the mind of the hiring manager whether you’re willing to put in the grueling hours or if you’re likely to burn out early.

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Another senior executive has fallen foul of the curse of 2018. Fred Jallot, Nomura’s global head of credit and asset-backed securities in Europe, the Middle East and Africa, is leaving the bank.

Jallot, who was hired by Nomura from Citigroup less than a year ago as head of global markets EMEA, was given a smaller job in January (global head of credit plus asset-backed securities in Europe, the Middle East and Africa in January 2018). He is now said to be, “close to leaving.”

Bloomberg reported Jallot’s exit on the terminal earlier this afternoon. The bank declined to comment.

Jallot’s disappearance comes after Barclays laid off senior credit traders in London earlier this month. It also reflects the dangers of taking a new job at a different bank late in your career. Before Nomura, Jallot spent around 12 years at Citi and around five years at Deutsche Bank.

Nomura’s overall global markets business is jointly led by Steve Ashley and Yutaka Nakajima. The reason for Jallot’s exit is unclear. Revenues in Nomura’s fixed income business rose 14% year-on-year in the most recent quarter, thanks to what the bank described as improvements in both rates and credit.

Nomura made numerous big sales and trading hires last year. Alongside Jallot, it added Gokhan Buyuksarac, a top Goldman Sachs emerging markets trader, who joined in London in April, followed by Meraj Khan, the former head of emerging markets macro trading for Europe at UBS, who joined in New York. it also brought-in Omar Ghalloudi, the former head of investment grade credit trading at Citi, plus two senior emerging markets traders from Credit Suisse and Bank of America. In Paris, it hired Frederic Giovansili, Citi’s former head of French markets, to set up a new credit trading desk. In Singapore, it hired Ajay Abrol from Millennium for macro trading in July.

Both Jallot and Ghalloudi were seemingly lured to Nomura by Wissam Farrah, a former Citi veteran who joined as head of EMEA global markets sales in October 2016. Farrah seemingly remains at Nomura.

Jallot is reportedly being succeeded by Matt Reader, a Nomura veteran who was previously head of fixed income structured products and global markets structuring and global head of rates.

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The rise of the robots in the trading world just got a little bit scarier for the people still employed by banks to buy and sell stocks. Being good at their day job is no longer enough – they must also have some coding skills.

Technology has recently been taking over traditional trading roles across the finance sector as algorithms and artificial intelligence outperform (expensive) humans. Late last year, for example, most of the vacancies in Goldman Sachs’ securities business weren’t for traders – they were for developers.

Traders, however, are starting to fight back against automation by trying to add tech skills to their resumes. Citi has announced that it will teach Python, a programming language often used by banks’ trading operations, as part of its training classes for analysts joining the firm in July. And it wasn’t Citi’s techies who came up with the idea – its traders wanted the new course added to the curriculum, reports Bloomberg.

This suggests that the new generation of traders will very soon be judged on their ability to code. “At least an understanding of coding seems to be valuable,” Lee Waite, head of Citi’s markets and securities-services unit in North America, told Bloomberg. “We’re moving more quickly into this world.”

Even some of the old guard are falling in line. Paco Ybarra, Citi’s global head of markets and securities services, has reportedly taken a version of the Python class.

Separately, summer on Wall Street doesn’t just mean going for alfresco lunches and rooftop cocktails – it also means wading through rats on your way to work. Last year, rat-related complaints to the city’s 311 helpline increase 10%, part of a three-year upward trend, reports the Wall Street Journal. Manhattan, where almost all NYC bankers work, had the most complaints per square mile. A Brooklyn-to-Manhattan commute is the most rodent infested – Brooklyn boasted the most total complaints in 2017.

Meanwhile:

UBS hires experts in hydrology and climate science. (Business Insider)

UBS’s London headquarters sells for £1bn. (City AM)

Standard Chartered recruiting 750 in Warsaw. (Financial Times)

Meet J.P. Morgan’s top-performing fund manager. (SCMP)

Former rising star of private equity world files for liquidation. (Financial News)

Banking job cuts in Germany. (Bloomberg)

ANZ axing “at least” 60 markets jobs. (Reuters)

Goldman backs firm that examines the size of your company’s salaries. (Bloomberg)

Famous Taiwanese rapper hits out at Citi and Deutsche Bank. (Bloomberg)

A sneak preview of Deutsche’s new art gallery. (Art News)

Follow @simonmortlock

Image credit: chinaface, Getty

Maybe making managing director (MD) at Goldman Sachs isn’t what it was? Following last year’s bumper promotion round, several of the people who received Goldman’s second highest accolade have already quit.

Nick Laux, the London-based head of single stocks derivatives trading and a Goldman Sachs lifer, is the latest exit. Laux joined the firm in 2011 according to FINRA and was made MD in last November’s promotion round.

Goldman Sachs didn’t respond to a request to comment on the move. Laux remains registered with the firm according to FINRA, but is no longer at his desk.

Laux’s exit comes after those of Mai Shin and James Westwood. Shin and Westwood were also promoted to MD last year and both have left Goldman for start-ups. Laux is thought to be joining Morgan Stanley.

It’s not just MDs. Executive directors are leaving too. Goldman Sachs has suffered various exits from its London equity derivatives team this year, including executive directors Francesco Taglietti and James Spooner in May. Several others are said to have left alongside Laux, including Borzu Masoudi, a New York-based equity derivatives trader who only joined from Deutsche Bank in July 2017. Masoudi is said to have been a rising star at GS and part of the team that reportedly made $200m in a single day earlier this year. Headhunters point to complaints about politics and a top-heavy hierarchy made worse by last year’s bumper promotion round.

The exits from Goldman’s London and New York equity derivatives teams come as the firm has been hiring in both Paris and London. In January, for example, Goldman hired Spencer Cross, the former head of equity index volatility trading at Deutsche Bank for its London team. Earlier this month, David Solomon, Goldman’s CEO-in-waiting, said the firm intends to grow its corporate equity derivatives business as it seeks to expand its corporate client base.

Research firm Coalition said equity derivatives revenues increased 56% between the first quarter of 2017 and the first quarter of 2018. Goldman isn’t the only one hiring and losing staff in the area. Citi just recruited Mohand-Saïd Ladaoui, a former equity derivatives VP at Barclays in London.

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SocGen has lost its most senior credit trader.

Insiders say Laurent Henrio, global head of credit trading at the French bank, left yesterday after resigning two weeks ago. Neither SocGen nor Henrio responded to requests to comment.

Henrio joined SocGen from J.P. Morgan as head of structured credit trading in 2010. He was promoted to deputy head of global credit trading in March 2016 and then to global head in May 2017, managing all exotics and flow trading. It’s not clear who’s replacing him or where he’s going next, but Henrio is thought to be joining the buy-side.

Henrio’s exit follows analysis of first quarter results by banking research firm Tricumen, which suggested that costs at SocGen’s fixed income sales and trading business were abnormally high as a proportion of revenues. Revenues at SocGen’s fixed income trading business fell 30% year-on-year in the first quarter of 2018, while those at Goldman Sachs, Morgan Stanley and J.P. Morgan rose 23%, 9% and 8% respectively. At Deutsche Bank, first quarter fixed income revenues were down 16%.

SocGen wants to grow its fixed income trading business though. In last November’s investor day strategy presentation it said it wants to achieve ~2.5% compound average growth in its global markets division and to increase its global markets presence in the eurozone. In January we reported that SocGen hired Kaisa Johanna Eskelinen, a credit saleswoman from Credit Suisse to help grow its business.

Henrio’s exit follows other senior moves at SocGen. Richard Quessette, head of equity and equity derivatives for global markets, left earlier this month.

Barclays is building out its investment banking business in Continental Europe. As our German editor reports today, the British bank is said by headhunters in Frankfurt to be recruiting a head of investment banking for Germany to replace Alexander Doll, plus a new head of equity capital markets for Germany, Austria and the Nordic countries. This follows a report in Financial News to the effect that Barclays has an “aggressive hiring” programme in Continental Europe.

Barclays has certainly been doing some Europe-related recruitment. Since the start of this year, it has added eight managing directors to its EMEA business, of which two were internal moves and the remainder were hired externally.

Barclays has 10 offices in EMEA, located in Paris, Frankfurt, Madrid, Lisbon, Milan, Zurich, Dublin, Amsterdam, Stockholm and Tel Aviv. Nonetheless, all but one of the new hires are based in London.

A case in point is Enrique Piñel, who came to Barclays this month from J.P. Morgan as head of the financial institutions group (FIG) for Iberia. Although Barclays has an office in Madrid, Piñel – who worked in London covering Iberian clients for J.P. Morgan – is working out of Canary Wharf. Piñel will report to Luis Zumárraga, head of capital markets and risk solutions for Iberia, who is based in Madrid.

Francois Baroin, a senior external advisor to the French business, is Barclays’ only senior EMEA hire who’s based outside the UK this year. The British bank’s affinity for London is contrast to rivals like Goldman Sachs. Goldman has said it plans to double the size of its investment banking team in Europe in the next three to five years and to move “tens” of London bankers to Paris by the end of this month.

It’s not clear whether things will change at Barclays as the British bank adapts to Brexit. For the moment, the new recruits are understood to about increasing returns rather than responding to Britain’s break with the EU. Barclays’ market share for the investment banking division in EMEA is understood to be around 5%, while in the UK it’s closer to 10% – creating the opportunity for growth. In Frankfurt, Barclays currently employs around 170 people and insiders say there’s still some room for expansion in the office, “but not every much”.

Suitcase banking may remain a thing, then.

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The exits at Deutsche Bank continue. Insiders say some of the German bank’s most senior equity derivatives professionals in Europe have left today, seemingly for Morgan Stanley.

The departures include Sean Flanagan, previously global head of equity structuring at Deutsche Bank, plus Antti Kari, a managing director in equity derivative sales. Several equity derivatives professionals are rumoured to have left too.

Deutsche Bank declined to comment on the exits. Morgan Stanley didn’t respond to a request to comment on its alleged hires.

Flanagan had been at Deutsche Bank since 2010, when he joined from Citi. Kari joined from Merrill Lynch in 2011 and was promoted to managing director in March. Her exit suggest Deutsche is losing staff it might like to keep.

As we reported earlier today, equity derivatives is a hot market this year: Coalition says equity derivatives were up 56% year-on-year in the first quarter. Morgan Stanley would therefore not be alone in hiring.

Deutsche Bank is in the process of making 7,000 people redundant across the organisation under new CEO Christian Sewing. Around 5,000 are expected to come from the investment bank and Sewing has said he plans to make the “vast majority” of the front office cuts by July.

Despite the layoffs, Deutsche is said to be fighting hard to keep staff who are core to its new strategy. Headhunters said the German bank has been offering buy-backs of 50% or more to senior staff who threaten to quit. Some are leaving anyway, spurred on by the low DB share price and uncertainty about the bank’s future.

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If you step into an interview with Credit Suisse (presuming you make it through their initial application process), you will want to be prepared. Many people apply for banking jobs. Few make it through. Credit Suisse hasn’t released application numbers, but Deutsche Bank recently said it had 110,000 applications for its 619 graduate jobs last year. If you want to get in, you will need to be good. And to be good, you will need to prepare.

With this in mind, we have scoured the internet for questions asked in recent Credit Suisse interviews. Listed below and categorized for the investment banking division (IDB), sales and trading (markets) and technology, they cover the questions you will probably be asked. You won’t definitely get in if you can answer them, but it will certainly help.

IDB (Investment Banking Division) interview questions from Credit Suisse

To the best of your ability, can you tell us what high yield debt is?

If a company acquires another company with a lower P/E ratio, is the deal accretive or dilutive?

How would you go about calculating free cash flow?

When looking for a good leveraged buyout (LBO) candidate, what characteristics would you typically look for?

What would your client companies tend to do if the interest rate rose? Specifically, how would this influence their M&A activities?

How would you handle a discounted cash flow (DCF) analysis?

What is the angle between the two hands of a clock at 3.15pm?

Can you walk me through a typical IPO?

Could you calculate a DCF or net asset value (NAV) using Excel if I were to give you an appropriate model?

If an unlisted British manufacturer came to us to raise debt on the capital markets, what corporate parameters would you look at and what would you advise them?

Sales and trading interview questions from Credit Suisse

What will influence the price of a residential mortgage backed security?

Can you produce a forward FX model for PLN/USD (the Polish Zloty/the U.S. dollar)?

Can you calculate the delta of an option without using the precise formula for delta? How?

You have a set of scales and nine bowls. One is gold, the rest are bronze and a different weight, You can only use the scales twice. How do you find the gold bowl?

Explain a credit default swap to me?

What recent developments in the news may affect the bank’s activities?

If you have one a cube that is made of 6x6x6 little cubes and you put it into paint, how many cubes would get painted?

What are the risks of waiting until 2019 before raising the interest rates substantially in the U.S.?

Describe the behaviour of x^(1/x).

How many zeros are there in 100 factorial?

Technology questions from Credit Suisse

Can you design an algorithm for finding the number of integer squares in a given numerical range?

Can you create a function to register an order which contains these fields: user id, order quantity (e.g.: 3.5 kg), price per kg, (e.g.: £303), order type: BUY or SELL?

What’s the different between Java and C++?

Explain extract transform and load (ETL) process in a data warehouse (DW).

You have 1,000 bottles of wine, of which one bottle is poisoned. You have unlimited rats. e.g. You can use 1 rat and get it to drink through the 1,000 bottles (which would takes 1,000 tests). Or you can use 1,000 rats and each rat drinks 1 bottle (1000 rats, 1 test). Find out an optimal solution that use minimum number of rats and minimum number of tests.

How is a normalized database better than a denormalized one?

In the context of SQL, what does Union do?

What is the difference between a levered and an unlevered free cash flow (FCF)?

Give examples of various Agile management methodologies.

Sources: Glassdoor.com, WallStreetOasis.com, Vault.com

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The FIFA World Cup has begun. Goldman Sachs has devised an algorithm that says Brazil will win, so maybe it’s a foregone conclusion. Some teams (eg. the U.S.) haven’t even qualified.

Even so, when you work in a bank, there are a few things you need to know about World Cup season. I’ve lived through several, and they require careful handling.

1. You need to keep up with what’s going on

Even if you’re not that interested in soccer, you need to be interested in the World Cup. These are four weeks of banter, office sweepstakes and Word Cup small talk. If you’re not a part of it, you’re going to miss a huge networking opportunity – both with clients and colleagues. If you have any kind of sales or client facing role, you absolutely need to be able to talk about the World Cup as an alternative to discussing the weather or summer holidays.

It helps that TVs on the trading floor are switched to the World Cup constantly. You have no excuse.

2. You must not come into the office wearing your national flag

Banks are places of multiple nationalities. While it’s ok to be quietly patriotic about your national team, full jingoism ifs frowned upon. On the trading floor, the most you can do is to put a flag on your desk. Everyone’s very competitive about their team, but it’s very amicable competition. You must be low key.

3. If you haven’t already booked-up client events for days when major teams are playing (eg. England), you are far too late

When you work in sales, the World Cup is about client entertainment. We arrange a lot of client events at bars and rooftop clubs. It’s all about entertaining clients during key games. If you haven’t arranged something for known games already, you’re too late.

4. If you’re entertaining clients, you can drink at lunch but do NOT come back

It’s usually unacceptable to drink at lunchtime – particularly if you work for a U.S. investment bank. During World Cup season, exceptions can be made when you’re entertaining clients – but do not come back into the office after the game. Most U.S. banks will not allow you to leave your desk or the trading floor during a game (even if it’s your own team). Smaller houses and brokerages firms are more likely to be lenient.

5. Don’t presume you can get away with doing less work

Just because you like the World Cup, don’t assume clients do too. Some clients will always make it very clear that they consider it to be business as usual during World Cup season and that they won’t be slowing down. I’ve even had client telling me that he hates the World Cup for the distraction it brings.

Howard Smith is the pseudonym of a salesman in the City of London

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Conflicted about whether you want to work on the sell-side or the buy-side? Get a job at Goldman Sachs and you can do both, apparently. The firm has reportedly given its investment bankers the keys to a venture capital portfolio worth several hundred million dollars that enables them to invest in startup companies.

The unique arrangement allows Goldman bankers to double-dip through their relationship with startups. They can do their traditional job – advising on potential M&A deals and underwriting IPOs – while simultaneously taking a financial stake in a company they know well using the firm’s money. Conversely, bankers can leverage the firm’s investment in a startup to create relationships with an eye on future deal-making.

For Goldman bankers, their part-time gig has sometimes been more lucrative than their full-time one. The firm made around $15 million advising Spotify on its IPO, according to the Wall Street Journal. Meanwhile, Goldman made $350 million in paper gains from its initial investment in the company, representing a seven-fold return.

The banker-led fund, distinct from those run by strategy and asset management groups at Goldman, appears to be doing fairly well based on some of the names included in the report. Goldman bankers got in early at Uber, Dropbox and Square, and have made more recent investments in lesser-known Ripple Foods and credit card startup Marqueta, according to the report.

The arrangement provides ancillary benefits to Goldman bankers outside of the opportunity for bigger commissions and better leads, if those weren’t enough. Investment bankers can also claim experience moonlighting as a VC, further padding their resume if they ever wanted to make the actual leap to the buy-side.

The revelation about Goldman bankers’ supplementary role prompts one clear question: why don’t more banks follow suit? There’s money to be lost, of course, but there’s also the issue of potential conflicts of interest, something executives at Goldman and Spotify played down in comments to the Journal. Plus, there is the possibility that other firms prefer to keep their investment bankers focused on their chief responsibilities. Either way, this appears on the surface to be a big win for bankers at Goldman Sachs.

Elsewhere, the FT just announced its latest ranking of the best master’s in finance programs. The top spot on the list went to HEC Paris, where you can earn you degree for just around $35k. In comparison, tuition for the program at MIT’s Sloan School of Management, ranked seventh on the list, will cost you north of $100k. Both programs provide similar salary expectations. The average graduate from each earns around $140k three years after getting their degree.

Meanwhile:

Citigroup takes bigger trading risks than any other bank. They put around $93 million at risk every day, around 20% more than Goldman Sachs. (Bloomberg)

RBC plans to double its headcount in Frankfurt as part of the Canadian bank’s post-Brexit plans. (Handlesblatt)

Credit Suisse is scaling back plans for aggressive expansion into Ireland, instead focusing its post-Brexit plans on Madrid and Frankfurt. (Independent)

It’s not a good year to be working at a hedge fund that concentrates on cryptocurrencies. Crypto funds are down around 35% on the year. (FT)

Out-of-work traders may want to take a look at startups. Their experience is good preparation for startup culture. (Cue Macro)

Merrill Lynch is considering lifting a ban on commission-based retirement accounts, returning another source of compensation for brokers. (WSJ)

Banks’ efforts to increase racial diversity don’t seem to be working. The number of black employees at banks like J.P. Morgan and Citigroup keeps falling. (Bloomberg)

New mothers typically experience a dip in earnings. New fathers, on the hand, tend to see an increase in pay, known as the “daddy bonus.” (NY Times)

Uber has developed AI-based technology that can tell drivers if passengers are drunk before choosing to pick them up. (Metro)

Follow @BeecherTuttle

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Two years is a long time to be out of the market, particularly when you’re a trader. And yet, a trader who left Nomura in 2016 and who hasn’t been employed since according to his LinkedIn profile, just got rehired in a better job at J.P. Morgan.

Benjamin Borrel left Nomura after it shut down its European equities business in April 2016. He joined JPM as an executive director in London earlier this month and will handle systematic equity trading for the Central Risk Book (CRB).

As we reported previously, central risk book trading has been given a shot in the arm by MiFID II regulations, which came into force earlier this year. The new rules have encouraged banks to set up their own systematic internalizers, which make centralized risk trading and hedging an inevitability.

Borrel also worked on the central risk book and systematic equity trading at Nomura. His ability to find a new role at JPM two years after leaving the Japanese bank was undoubtedly helped by a 17 month stint at J.P. Morgan in 2012, before he went to Nomura. Before that, Borrel spent over eight years at Goldman Sachs and a year at Millennium. Basically, he has pedigree.

Borrell didn’t respond to a request to comment for this article. J.P. Morgan isn’t the only bank hiring for its central risk desk now. Headhunters tell us most banks are in the market for central risk and systematic equities talent. Michael Steliaros, global head of quantitative execution services, has been building out a systematic equities team at Goldman Sachs. J.P. Morgan is seen as one of the more advanced banks in the area after focusing on algorithmic trading for the past few years, while banks like Goldman Sachs fell behind.

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Millennium Management is bringing in junior bankers as it looks to build its equities team under Peter Santoro, the former global head of equities trading at Morgan Stanley whom it hired in February last year to head its equities business.

The $35.3bn hedge fund, which is run by Izzy Englander, hired Joseph Largman, an investment banking associate at Moelis & Company, as an equities analyst in its London office earlier this month.
An M&A banker by training, Largman started his investment banking career with Citi in 2012 and moved to Moelis & Company as analyst in 2014.

Largman’s arrival at Millennium highlights hedge funds’ interest in young bankers with sector or country knowledge. A Brazilian by birth, Largman will focus on Latin America at Millennium. Jonathan Jones, head of investment talent development at Point72 Asset Management, recently wrote here that hedge funds can offer better careers than private equity for former banking juniors. – in a PE fund you’ll be managing the whole bureaucratic deal process; in a hedge fund, you’ll be given more autonomy and will be able to pursue your own investment ideas. “The market itself gives you real-time feedback on the quality of your ideas every day,” said Jones.

Largman isn’t Millennium’s only hire for its equities team this year. In March it recruited Daniel Melum, a former senior research associate for US retail at AB Bernstein, and Alireza Berry-Noubar from BlueCrest Capital Management. Melum joined in March as an equity research analyst for consumers in New York. Berry-Noubar joined as an equities analyst in London. Berry-Noubar began his career in M&A coverage at Morgan Stanley.

Millennium also hired Jonas Hoersch in January 2018, and William Miller a month later, according to the FCA register, as equities analysts in its London office. Prior to joining Millennium, Hoersch was an equities research analyst at Deutsche Bank, where he began his career and worked for two and half years, while Miller, who graduated in Mathematics from the University of Bath in 2015, was previously a research analyst in UK utilities at Lazarus Partnership.

Equities analysts have been looking to escape banking following the introduction of MiFID II. Millennium is clearly hiring. Junior bankers who want to do something different may also want to give the fund a call.

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Next Saturday is the June sitting of the 2018 CFA exams. If you’re one of the tens of thousands of candidates enrolled to take the exams then good luck. They are not easy, as the low pass rate reflects.

However, as someone who has passed all three exams, and achieved the Charter, I want you to know that there are several things you can do to help yourself.

Mind blank? Go to the toilet!

Mind blanks during the CFA exams are more common than not. During each level, I remember opening the exam booklet, flicking through the questions and periodically having a memory blur. If this happens to you, my advice is to answer a few questions in areas you’re strong on, to build confidence and hopefully bank some marks. If your mental block reaches the stage where you can’t remember a particular formula or topic, go to the toilet or to the water dispenser (even if you don’t need to). The walk away from the paper will reset your mind, hopefully allowing you to regain mental clarity when you come back.

Get some earplugs

Earplugs are permitted in the exam hall. They are especially useful if the person next to you has a cough, and intermittently needs to clear his or her throat. As the London Excel test centre is pretty close to London City Airport, earplugs help drown out the noise of the occasional plane that flies by.

Put your pencil down when asked to

When the proctor says “Stop writing and put your pencil down”, this means STOP AND PUT YOUR PENCIL DOWN. If you continue, you have failed to follow very simple instructions, in addition to being in violation of the CFA code of ethics. At the end of my level III exam, there was a guy a few rows in front who carried on marking on his MCQ sheet. He was followed by a proctor who who noted his candidate ID. Imagine the pain of getting disqualified at the final hurdle.

Let the procters know if you’re being distracted

When I sat my level II exam, the person in front of me was vigorously shaking his leg. I could only imagine how disruptive that was for the person sharing a table with him (at the Excel centre in London, it is two people per long table). In these situations, telling a proctor (as he did) does not make you a grass. You want to optimise your exam conditions, and don’t want one person’s nerves to cost you six months of hard work.

Have breakfast and have lunch, but eat sparingly

These will be two of the most important meals you have on exam day. Don’t eat anything that will upset your stomach. I saw a guy wolfe down two large burgers during the lunch break (probably stress eating). I then saw the same guy in the exam hall disappear for a whole 15 minutes (most definitely to the toilet) in the afternoon session. I’m not sure he managed to finish his paper.

Avoid your phone during lunch

This one is a personal preference, but one worth bearing in mind. Use the lunch break to eat lunch. There was a guy who spent 45 minutes of his break on the phone, talking about how tough the morning paper was. Before he knew it, it was time to go back in, and I’m sure his stomach didn’t thank him. In addition, talking about how tough the morning session was probably had a negative impact on his confidence for the afternoon session. Be warned.

Jai Doshi is a Hedge Fund Researcher at Mercer Investment Consulting and a CFA Charterholder.

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Goldman Sachs isn’t just losing managing directors; it’s hiring them too. The firm just re-hired a longtime veteran of the company who formerly worked within the firm’s most lucrative and controversial business. Former macro prop trader Robert Surgent rejoined the company in June as a managing director in New York.

Surgent worked at Goldman Sachs for over 17 years until 2010, when banks had to cease the practice of proprietary trading following the implementation of the Volcker Rule. He jumped to the buy-side in 2011, spending five years as a macro portfolio manager at hedge fund Tudor Investment Corp., according to LinkedIn. He last worked as a portfolio manager at Field Street Capital before re-joining Goldman.

Of course, Surgent won’t be refilling his old seat as prop trading remains banned. Still, the hiring is one of the more significant following the May ousting of two of Goldman’s co-heads of trading. The move left the securities business in the sole hands of Ashok Varadhan, who formerly served as the head of macro trading, Surgent’s specialty. The hiring may be a sign of Varadhan putting his own stamp on the division.

Meanwhile, Surgent could be re-joining the sell-side at just the right time. An upcoming new draft of the Volcker Rule will reportedly clear up vagaries that have scared banks off certain trades, not knowing whether they were compliant. It will also drop a stipulation that bars banks from making trades that are held for less than 60 days, with the assumption that those trades are speculative and against the Volcker Rule.

The presumptive changes have created a narrative on Wall Street that banks may soon be better positioned to take more trading risks. Sources told CNBC that Goldman Sachs and Morgan Stanley in particular would look for more opportunities across their fixed income, commodities and equities trading businesses. Goldman execs were particularly upbeat on the firm’s first quarter earnings call about the prospects of its trading business.

Goldman didn’t respond to a request to comment on Surgent’s arrival.

Follow @BeecherTuttle

“”

There are people at Google in Mountain View who want to work for Goldman Sachs in New York. Seriously. We have spoken to them. – People who think that working for banks like Goldman Sachs, which claim to be “tech companies”, might be better than working for an actual bona fide tech company with the motto, “Don’t be evil.” The problem, or part of it, is Google’s arcane system of promotions and internal hierarchy known as ,”the ladders”.

While investment banks have analysts, associates, vice presidents, directors, executive directors and managing directors in their hierarchies, Google has multiple ladders with up to 11 rungs to climb. There are different ladders for different career paths and swapping between them can be hard – especially if you want to get onto the most desirable ladders in areas like software engineering.

“I’m on the wrong ladder,” complains one Google insider. “I’m on the business ladder instead of the engineering ladder and now that I want to swap onto the engineering ladder, I can’t. Engineering pays more at the same level, but because I didn’t come in a software engineer, I’m kind of stuck here.”

We didn’t speak to Google for this article, but we did speak to several current and former Google employees. It turns out that for a company that’s supposed to have a flat management system, Google has an awful lot of levels in its hierarchy.

The levels on Google’s ladders

Quora does a very good job of describing Google’s popular engineering or technical ladder here. Level five is where things start to get serious: this is when you become a “senior software engineer”. By level eight, you’re a “principal” (kind of like an ED in a bank). By level nine, you’re a, “distinguished software engineer” (kind of like an MD). By level 10 you’re a Google fellow (there are only around 12 of these, so like a GS partner except more rarefied – although known as a “VP” in Google-world). And if you’re at level 11 (“senior fellow” or “senior VP”), you’re in the stratosphere with Google stars like Sanjay Ghemawat and Jeff Dean.

Most Google ladders only have 10 rungs: Google myth has it that level 11 was created just to accommodate Dean and Ghemawat.

But what happens if you’re just an average Googler trying to make levels five and six?

This is where it seems things can get tough. – Especially if you want to make level five on the engineering ladder and you’ve been climbing a different pole. Insiders say ladder switches do happen, but that they come with downsides. “It usually means a demotion,” says one machine learning specialist who formerly worked for Google.

“Yes, we do ladder transfers,” agrees one Google employee. “But sometimes they come with a ‘down-level,’ so that if you’re level five in business (O ladder), you’ll have to go L4 in engineering (T ladder).” The ladders themselves, and the opportunities for switching between them are super-complicated, he adds: “You could write a book on this stuff. There are job families with ladders and roles within those job families.”

What makes the engineering ladder so popular? Firstly, it pays more. Secondly, it’s super-prestigious within Google. And thirdly insiders say it’s seen as housing some of the biggest brains in the company. “You couldn’t move from business development level five to engineering level five, because you’d be a laughing stock to all the engineers below you,” says the machine learning ex-Googler.

Confusingly though, engineering has two parallel streams: an engineering track and an engineering management track. Insiders say the two are parallel until around levels eight or nine. After this, the super-engineers carve a path of their own. Unfortunately, this means people on the ‘business’ ladder who might’ve been able to tout their management skills are even less able to swap across.

It’s not all bad news, though. While a bank like Goldman Sachs has decided it’s top heavy and now only promotes to its top levels (managing director and partner) once a year, Google pushes people up its ladders twice annually. To climb a rung, you need a “promo packet” which is reportedly filled with all the nice things other people have said about you and all the great things you’ve achieved at work. If you’re in a technical ladder, you can put this together for yourself when you think you’re ready. If you’re in the other ladders, it’s up to your boss to put you forward.

Even so, some Googlers say climbing the hierarchy at Goldman Sachs seems a whole lot simpler – particularly as Goldman CEO Lloyd Blankfein keeps reiterating the potential for engineers at the firm.

Meanwhile, Google employees caution against going into Google without some understanding of how the system works: “I had no idea how the game was played regarding levels and ladders when I joined here,” says one Googler. “That’s turned out to be a problem for me.”

““

“After going to one of the best business schools in the world, you can’t possibly ever be the same way again,” says Sue Huey Chuah, who graduated in 2017 from the EMBA-Global Asia, run by London Business School in partnership with Columbia Business School and the University of Hong Kong. Although she had heard from EMBA-Global alumni that their two years on the programme had been the best of their lives, Sue says she found it hard to believe them – until she arrived at London Business School.

“From day one I knew I would be a different person,” she says. “And now everything, from how I make my decisions to how I see the world, has changed forever. It’s still changing, in fact, and will continue to change.”

Sue, who currently works in transaction advisory services at EY, was attracted to the programme by its high ranking in EMBA league tables (the programme was ranked #2 in the Financial Times Global EMBA Rankings 2017), and by the alumni she met before she started the programme.

She says she wanted a “truly global experience” from her EMBA, and the programme – which is delivered across three continents and three campuses – was exactly what she was looking for. “I got the benefit of incredible professors and hundreds of students from all over the world, with views so rich and distinctive. If you bring together people with so many collective years of experience in business, the learning is always going to be profound. There’s so much that I draw on every day at work.”

The insights Sue gleaned from the EMBA-Global on game theory, decision-making and leadership, for example, have become “invaluable tools” that help her in her job. “In a classroom setting with this level of faculty and with such accomplished peers, the best questions and the most meaningful answers are drawn out,” she says.

“Now, I see problems with a clear perspective. The EMBA-Global not only enabled me to move to London, but it changed the way that I interact with people – my peers and senior leaders,” adds Sue. “The biggest impact is this: when I come to work, I don’t just come to work as me anymore. I come to work with the knowledge that I’m connected to powerful platforms across three different continents.”

Initially daunted by the idea of a move to London – despite previously living in Malaysia, Singapore, San Francisco, Manhattan, Vietnam and briefly, Germany – Sue anticipated an adjustment period when she arrived in the UK. But there wasn’t one.

“I had been very comfortable with Asia Pacific: doing business, flying from one country to the other. I could deal with any complications because of my familiarity with the region,” she says. “Here in London the people and the culture were new. But LBS made it easy. There’s a whole community of people who are very welcoming. I reached out to the Executive MBA London people and the EMBA Global people who were based in London and it plugged me in very quickly. I had a ready-made network.”

Perhaps the most surprising impact of the EMBA-Global on Sue is that it’s made her more relaxed. She says running a hectic schedule of both work and study alongside others who are doing the same has given her a new perspective on investing her time. “Places aren’t made up of just systems and processes,” she says. “I used to think so, but now I realise that they’re made of people. I am more relaxed because I know that going forward in my career, I can always solve complex problems by bringing good people together.”

Sue says the LBS Career Centre was instrumental in helping her crystallise her plans for the future. “They made me think about my career as a whole, not just the next step. Before business school I assumed I would be in Singapore forever, but now I’m in London. I never imagined that I would sit in a deli in Regent’s Park talking to a world-renowned professor about the news, but that kind of informal access to some of the greatest minds in the world happens a lot at LBS. You see a bigger picture. It’s quite a privilege.”

When Sue started the EMBA-Global, she knew that success would be about what she put into it, rather than what she would get out of it. For her, contributing positively to the programme and the LBS community as a whole meant investing in her peers and getting to know the faculty.

“The access you have to current and future thought leaders is so valuable,” she says. “If you’re thinking about applying for the EMBA-Global, go for it. You’ll come out two years later with a new view of the world. It’s a very powerful platform.”

Morgan Stanley CEO James Gorman has been an intermittent source of advice for ambitious young bankers over the ages, recommending, for example, that they “pace themselves,” spend some time working overseas, and care partly about themselves and partly about the corporation in equal amounts. Now guru Gorman has issued a new insight: if you didn’t experience the last financial crisis, you need to watch yourself.

“It really helps to be a little paranoid and a little scarred,” Gorman said at a conference on culture run by the New York Federal Reserve yesterday. “Forget about what the regulators want, what the public want, what the politicians want; we don’t want [another crisis],” he added.

The trouble for anyone who entered banking after 2008 is that they have no scars from the 2008 crisis, said Gorman. They can suffer the, “tyranny of success,” said Gorman and presume that because things have been ok, they will remain so.

This would seem apply to almost everyone under 30 in finance. However, Gorman’s real fears are for the neophytes coming into banking now and next year, who will become the VPs and MDs of the future. Here, he warned that “grade creep”, or grade inflation, is at work as people experience a growing sense of security, “My fear is . . . those people who haven’t been through the last 10 plus years . . . the crisis, the post-crisis, the [London] Whale, all the other stuff that has happened since,” he said. “Fifteen years from now, will management come to work every day with sufficient scarring or not?”

At the very least, unscarred bankers might be advised to read widely on the crisis and its causes in the hope of achieving some vicarious wounds.

Separately: don’t mess with bond manager Bill Gross. Following the revelation that Bill’s wife substituted one of his Picassos for a replica she painted herself, the New York Post reports allegations from his wife to the effect that Gross sprayed aromas called Liquid Ass and BARFume around the house before he moved out. “The houseplants smelled foul and need to be replaced,” said Sue Gross, who subsequently got a restraining order against her former husband. Gross is also said to have placed a dead fish in the air vents.

Meanwhile:

Winton Capital is spinning out its data company, Hivemind. (Financial Times)

Odey Asset Management is parting company with its sales directors. (HFMWeek)

Credit Suisse has increased its global headcount in leveraged finance to 124 so far in 2018, an increase of 13% from the end of last year. Staff rose by 14% in Europe, the Middle East and Africa, and by 12% in the Americas. (Bloomberg)

Want to work for Google? It helps to be Asian. (NYT)

A charity founded by a 24-year-old Goldman Sachs analyst Hamza Farrukh that aims to provide water to poor, rural communities in Pakistan and to Rohingya refugees in Bangladesh, won a $150,000 grant from the bank. (Business Insider)

The CME keeps the computers that run its exchange in Aurora, Illinois, making it among the most important nodes in the global financial system. (Bloomberg)

Even a single night of poor sleep can cause changes in the brain implicated in Alzheimer’s. (New Scientist)

““

If Generation Z are supposed to want flexibility and work-life balance, someone forgot to communicate this to the young people who are turning up to work in banks this summer: they expect to work hard and are already fully psyched-up to do so.

“I’m ready to work long hours,” says a summer analyst who’s joining Morgan Stanley’s investment banking division (IBD). “It will probably be up until midnight, but maybe until 1am or 2am.” Another intern, who’s joining Rothschild is even more ambitious: “I expect to work from 9am to 2am,” he says. “It’s not constant work throughout and you do get a bit of downtime, but I’ve been told the work doesn’t really get started until the later hours anyway.”

All of the incoming 2018 interns we spoke to discussed their expectations for the summer on anonymous basis. Banks require them to sign contracts agreeing not to speak to the media.- Intern working hours are a touchy subject ever since Bank of America IBD intern Moritz Erhardt died of natural causes after working for an alleged 72 hours straight in 2013.

Since then, some – but not all – banks have imposed restrictions on the number of hours interns can work. Goldman Sachs, for example, issued an edict in 2015 stating that interns have to stay out of the office between midnight and 7am on weekdays; this still stands. Bank of America interns are not supposed to work between midnight and 9am, or to work weekends.

At other banks, long hours for interns are less heavily proscribed. At J.P. Morgan, for example, interns are expected to work the same hours as other employees (who get one full weekend off each month), although interns’ hours are also carefully monitored and reported to HR weekly. At Morgan Stanley, there are no restrictions at all, but interns’ working practices are again carefully watched.

Hours are longest in investment banking divisions. Interns in other banking divisions are less ready for a summer of sleep-deprivation. One intern coming into Goldman Sachs’ operations division said she expects to work from 9am to 7pm on weekdays only. Another intern arriving on Morgan Stanley’s trading floor, said he expects 6.30am to 6pm to be the norm.

None of the interns we spoke to were compelled to put in 10 to 17 hour days by the banks they’re working for. They were all choosing to. “It’s the culture of the team,” said the Rothschild intern. “It’s just implicit.” An intern at Morgan Stanley said he’d been invited to sign a form agreeing to work more than 48 hours a week (this is the norm under the European working time directive) and had done so. – In an industry where over 100 people are chasing each job, refusing to sign is a death knell for your future banking career.

Interns are well paid for their commitment. This year, the going rate for 10-12 weeks at a big bank over the summer in London is £50k ($66k) pro-rated (ie around £970 a week), plus a £1k signing bonus. Last year, some interns told us they received £48k pro-rated for their internships, so intern pay appears to be rising.

Even so, new interns are advised to be mindful of their health. Last year, an IBD intern who regularly worked until 4am complained of gaining weight and losing friends. In 2016, a doctor was summoned to Goldman Sachs in Frankfurt when a young banker (not an intern) collapsed at 2.30am. He’d come into the office and stayed late despite feeling unwell because he was working on a live deal.

This summer’s interns may not necessarily get to work on live deals, but they will have the thrill of competing for a job offer. In doing so, they need to pace themselves – and to remember that it’s not just about being first in and last out. Receiving an offer at the end of a summer internship is also about networking and establishing which teams are and aren’t hiring: you can work all the 17 hour days you like, but it will make no difference if the team you’re in doesn’t need to recruit any juniors for 2019.

““

A decade ago, an MBA was clearly the top qualification to have if you wanted to start down the path toward a high-level job in banking. Then quietly, more top business schools began offering an alternative: the cheaper, more technical master’s in finance degree. By 2015, hiring totals suggested that a master’s in finance may actually have trumped the MBA as the top qualification. However, new data shows that MBA programs may be having a renaissance of sorts, at least when it comes to compensation.

Comparing salary expectations for MBA holders versus those with a master’s in finance is a difficult task. While MBA programs usually require some previous professional experience, you can often enter a master’s in finance program directly from undergraduate studies. This means an MBA should demand a higher starting salary than a master’s degree, and in fact it does. But MBA holders are also now seeing greater increases in salary post-graduation than they did previously. The picture is more muddled for recent master’s of finance graduates.

The average degree holder at eight of the top 15 master’s in finance programs recently ranked by the FT reported lower annual salaries after three years of experience than those who graduated one year earlier. This only occurred with two of the top 15 global MBA programs – IESE Business School in Spain and the University of Cambridge, both of which ranked outside the top 10.

Meanwhile, graduates of every top 15 MBA program but one reported at least a 100% increase in salary from the time they entered the program to three years after earning their degree. Even graduates from IESE and Cambridge Judge saw their salaries more than double over that period. That’s a stark difference from just a few years earlier, when graduates of every top MBA program reported three-year salary increases that were lower percentage-wise than the previous year. The value of an MBA appears to be on the rise.

When it came to the Masters in Finance courses where students didn’t have prior professional experience, the FT compared the starting salaries directly following graduation to what degree holders were making after three years. Among top schools, graduates from first-ranked HEC Paris saw the biggest three-year salary bump of 82%. The master’s program at the U.K.’s Imperial College Business School fared the worst, with graduates only earning a 43% increase in pay over three years. Imperial College alumni from 2015 now earn an average of $92k, meaning their starting salary was around $65k after graduation. At HEC, it was around $75k.

For MBAs, sticking around pays

There are several possible explanations for the new narrative that top MBAs are still a good deal. A masters qualification is well-aligned with lucrative sales and trading jobs, fewer of which exist now than in years previous. And of course, not as many MBAs enter banking as often as in previous years; many now take jobs in tech and consulting, so pay could be rising due to scarcity value. But the data seems to reject the premise that other industries are out-paying finance professionals, particularly in the early years for those who went to top schools.

Business schools that are the chief feeders into finance – Stanford, Wharton, Booth, Harvard and Stern – all saw their graduates who remained in the industry take home bigger salaries than those who left or never entered finance in the first place. Graduates of all five with the exception of Stern earned salaries north of $200k if they stuck around for three years.

Banks are thirsty for masters candidates

Perhaps the best news for master’s of finance grads is that they are clearly in high demand. Over 95% of students from nine of the top 10 programs had a job within three months of graduation, with four schools sporting 100% employment rates. For top MBA programs, the highest employment rate was 95% (Booth), while several languished in the 80%-90% range.

If you have little or no experience, a master’s in finance appears a near-lock to find a decent job in the industry. But it still pays to have an MBA. You just need to land a job first and handle the culture of banking for more than a couple years.

Follow @BeecherTuttle

“”

Jefferies has just released its results for the second quarter of 2018. If you work for a bank, their message is mixed.

1. Good times for fixed income traders did not last

Firstly, it turns out that the great first quarter for fixed income traders may have been no more than that: the second quarter took a distinct turn for the worse.

In Q1, Jefferies’ fixed income revenues more than doubled on the final three months of 2017, going from $101m to $213m. In Q2, however, Jefferies’ fixed income revenues shriveled nearly back to where they started at $119m. To add insult to injury, they were also 23% lower than the second quarter of 2017.

Fixed income traders who thought their time had come may have to rethink.

2. Given half an excuse, banks will cut pay

Jefferies’ 3,348 employees have had a pay cut. Last year, they each averaged $274k in salaries and bonuses for the first half. This year, they’re down to $262k.

The fall in pay follows the addition of 114 people in the past year. It also comes as Jefferies booked a provisional tax charge of $160m as a result of the Tax Cuts and Jobs Act which all but wiped out its first-quarter post-tax profits.

3. Equities trading revenues are weirdly steady

If fixed income trading revenues are shrinking back to their previous lows, at Jefferies at least, equities revenues are holding up. They were $175m in Q218 compared to $174m a year earlier.

4. Bankers are resurgent and hiring senior investment bankers makes good sense

As Bloomberg notes, Jefferies’ Q2 results help confirm Jefferies’ transformation from a trading house to an advisory and capital markets house. While trading revenues were weak to flat in the second quarter, investment banking division revenues rose significantly (up 43% in M&A and equity capital markets and up 40% in debt capital markets).

This follows years of M&A banker hiring by Jefferies which has helped propel the firm up the league tables. Who said senior bankers don’t perform when they’re transplanted to other firms?

5. Traders are finding it harder to turn a profit

Lastly, Jefferies results suggest a whiff of desperation on the trading floor. While the bank’s combined fixed income and equities trading revenues were down 12% year-on-year in the second quarter, the number of trading days on which Jefferies made a loss tripled from three to nine.

““

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