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Sunday, January 24, 2010 6:46:59 PM
Obama’s banker bashing: will it affect Asian employment?
22 January 2010
Simon Mortlock
Still in shock that Obama wants to ban banking as we all know it? Here’s how the Presidential proposal might affect employment here in Asia.
The plans, which must be agreed by Congress, prevent banks, or financial institutions that own banks, from investing in, owning or sponsoring a hedge fund or private equity fund. They would also bar proprietary trading.
The affect on prop trading employment in Asia may be fairly limited. Employment experts here expect the American rules to prevent US banks like JP Morgan and Goldman Sachs from simply moving all their prop pros to Hong Kong or Singapore.
In addition, the financial crisis has already decimated demand for prop traders in both the US and Asia. Many of them lost their jobs way back in Q4 2008 or Q1 last year, and would have already ruled out a return to their former sector, even without the Obama plan, according to a Singapore headhunter who asked not to be named.
If prop traders at US banks in Asia do eventually face another round of layoffs, which in itself is not guaranteed, the numbers involved would probably be limited because headcounts in this function are comparatively small. So far there are no indications that countries in Asia plan to copy the American regulations.
Bring on the hedgies
The US crackdown may, however, bring more hedge fund professionals into Asia, reinforcing a trend which has been gathering momentum in recent months.
Soros Fund Management and GLG Partners are among those currently planning a Hong Kong office. The potential for making large personal profits at hedge funds in Asia will now seem all the more attractive to experienced US i-bankers.
“The news from America will probably motivate more investment bankers, especially those over 40, to work for hedge funds, or set up their own, instead of remaining as bank employees. Some of these people will naturally be looking to move to where the growth is: Asia,” says Andrew Price, a director at Global Search Partners.
Asia looks even more attractive
The US proposals, as per the recent UK bonus tax, will also reinforce existing employment market sentiment that Asia is the region generating jobs, while the West is stifled by excessive regulation.
“In general, we are seeing a lot of overseas interest from candidates looking to relocate to Asia, and Hong Kong seems top of the list for most bankers,” comments James Carss, director, banking & financial services, Hudson.
But it’s too early to say whether there will be a sudden spike in relocations in the wake of Obama’s announcement, especially because the rules currently lack detail and a protracted Congressional debate is expected.
And opportunities for Americans will be limited to sectors which don’t demand existing Asian networks and/or market knowledge. Farida Charania, chief executive officer, banking and financial services, Nastrac, says trade execution could be one of these functions.
“We’re already seeing execution roles opening up this year, and now I would expect a few more to migrate out to Asia,” she adds.
Of course the US global tax regime will continue to limit the monetary advantages of moving to Asia.
In the UK, the opposition Conservative Party has pledged to implement a similar scheme to Obama’s if it wins this year’s general election. British bankers, less burdened by domestic tax while overseas, seem more likely to seek out Asian employment than their traditionally travel-weary US counterparts.
Unless the Obama plan convinces more American bankers to officially become Asians. “Tax is a huge issue for US citizens. Obviously HK has a more favourable tax system than America. There has even been some noise in the market regarding US nationals potentially giving up their and citizenship for other countries, including Hong Kong,” comments Carss.
COMMENTS(2):
Aya! more expats la? We need a foreign labour head tax
Seeno Fobic yesterday
_____________________________________
Is this a sign that HK or Singapore or possibly Shanghai, Seoul, or Taipei may become the next London or NYC?
=-O The Rise of the Asian Century is upon us
RW yesterday
http://news.efinancialcareers.sg/newsandviews_item/newsItemId-23340
22 January 2010
Simon Mortlock
Still in shock that Obama wants to ban banking as we all know it? Here’s how the Presidential proposal might affect employment here in Asia.
The plans, which must be agreed by Congress, prevent banks, or financial institutions that own banks, from investing in, owning or sponsoring a hedge fund or private equity fund. They would also bar proprietary trading.
The affect on prop trading employment in Asia may be fairly limited. Employment experts here expect the American rules to prevent US banks like JP Morgan and Goldman Sachs from simply moving all their prop pros to Hong Kong or Singapore.
In addition, the financial crisis has already decimated demand for prop traders in both the US and Asia. Many of them lost their jobs way back in Q4 2008 or Q1 last year, and would have already ruled out a return to their former sector, even without the Obama plan, according to a Singapore headhunter who asked not to be named.
If prop traders at US banks in Asia do eventually face another round of layoffs, which in itself is not guaranteed, the numbers involved would probably be limited because headcounts in this function are comparatively small. So far there are no indications that countries in Asia plan to copy the American regulations.
Bring on the hedgies
The US crackdown may, however, bring more hedge fund professionals into Asia, reinforcing a trend which has been gathering momentum in recent months.
Soros Fund Management and GLG Partners are among those currently planning a Hong Kong office. The potential for making large personal profits at hedge funds in Asia will now seem all the more attractive to experienced US i-bankers.
“The news from America will probably motivate more investment bankers, especially those over 40, to work for hedge funds, or set up their own, instead of remaining as bank employees. Some of these people will naturally be looking to move to where the growth is: Asia,” says Andrew Price, a director at Global Search Partners.
Asia looks even more attractive
The US proposals, as per the recent UK bonus tax, will also reinforce existing employment market sentiment that Asia is the region generating jobs, while the West is stifled by excessive regulation.
“In general, we are seeing a lot of overseas interest from candidates looking to relocate to Asia, and Hong Kong seems top of the list for most bankers,” comments James Carss, director, banking & financial services, Hudson.
But it’s too early to say whether there will be a sudden spike in relocations in the wake of Obama’s announcement, especially because the rules currently lack detail and a protracted Congressional debate is expected.
And opportunities for Americans will be limited to sectors which don’t demand existing Asian networks and/or market knowledge. Farida Charania, chief executive officer, banking and financial services, Nastrac, says trade execution could be one of these functions.
“We’re already seeing execution roles opening up this year, and now I would expect a few more to migrate out to Asia,” she adds.
Of course the US global tax regime will continue to limit the monetary advantages of moving to Asia.
In the UK, the opposition Conservative Party has pledged to implement a similar scheme to Obama’s if it wins this year’s general election. British bankers, less burdened by domestic tax while overseas, seem more likely to seek out Asian employment than their traditionally travel-weary US counterparts.
Unless the Obama plan convinces more American bankers to officially become Asians. “Tax is a huge issue for US citizens. Obviously HK has a more favourable tax system than America. There has even been some noise in the market regarding US nationals potentially giving up their and citizenship for other countries, including Hong Kong,” comments Carss.
COMMENTS(2):
Aya! more expats la? We need a foreign labour head tax
Seeno Fobic yesterday
_____________________________________
Is this a sign that HK or Singapore or possibly Shanghai, Seoul, or Taipei may become the next London or NYC?
=-O The Rise of the Asian Century is upon us
RW yesterday
http://news.efinancialcareers.sg/newsandviews_item/newsItemId-23340
_______________________________________________________
If you take anything I say as advice, you're crazier than I am.
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