Scandals hit bank recruiting

(CNN) – Another week, another round of news that suggests it’s a bad time to be a banker.

First came news Deutsche Bank became the first global bank to that could claw back payouts. Deutsche Bank's clawback rules allow it to take away from newly hired senior staff the un-vested equity bonuses earned at previous employers - if they were turned into Deutsche Bank shares. This is a significant tightening of bonus rules by Europe's largest lender, CNN’s Jim Boulden says. Pay consultants say the rule is unusual in the banking world and comes as European banks now hold employees accountable for questionable behavior.

But the question remains: Will other banks follow? And will the new rules give Deutsche Bank trouble recruiting?



Deutsche Bank isn’t the only one in the spotlight this week. Italy’s UniCredit is being investigated in the U.S.over allegations it skirtedU.S. sanctions, in another sign that scandals hitting the banking industry are not over. UniCredit admits one of its German units is being investigated by U.S. authorities for possibly breaking sanctions that prohibit doing business with “certain countries” - that likely means doing business with Iran. UniCredit joins Commerzbank, RBS and Standard Chartered as banks being investigated by various U.S. authorities for alleged business with Iran.

As a result of these scandals, there seems to be a rising social stigma about working in the banking industry amid the Libor rate-rigging scandal and recent money-laundering investigations. Some recruiters are saying some investment banks are forced to raise starting salaries to attract top graduates because of "banker bashing. According to the Daily Mail, the starting salary in London is now upwards of $79,000 – a 5% increase. One headhunting firm says graduates are now thinking of "longer studies or professional services" rather than finance.

As CNN’s Nina dos Santos points out, this wave comes a few years after Bob Diamond famously said “the era of banker bashing should be over” as the world recovered from the 2008-2009 financial crisis. But, of course, Diamond is now out of a job, having resigned in July as CEO of Barclays as a result of the bank’s role in the Libor scandal.

Should graduates reconsider a career in banking? Have your say. Leave your comments below.

Source & Image : CNN Business