Big banks are moving regulators out of New York City

Wall Street doesn’t mind hiring compliance officers — it just wants them a few thousand miles away.

New York City has seen an exodus of banks’ back-office workers this year — and can expect to see even more shedding in 2019 — as weaker regulatory oversight has encouraged big deals and boosted profits to all-time highs.

Wall Street, which made a record $62 billion in profit last quarter, is hiring less-experienced compliance officers and back-office employees in places like Buffalo, NY, Salt Lake City and even Poland, as banks shed costs and keep rule-followers out of the hair of the pin-stripe-suit set.

That shift is leading to concerns of a brain drain in banks’ own oversight as experienced compliance officers face smaller paychecks in second- and third-tier locations if they want to keep their jobs.

“Nobody like me, if they can help it, wants to go live in the middle of nowhere in Utah,” an experienced compliance officer and former regulator told The Post.

Compliance officers are the hall monitors of the finance industry, making sure bankers and traders follow rules to prevent money laundering or making deals with partners that could bankrupt the firm.

Major banks like JPMorgan Chase, Citigroup and Deutsche Bank hired them in droves in the wake of the 2010 Dodd-Frank financial reform laws, which required banks to justify more trades and deals, creating reams of paperwork for anything remotely risky.

But regulators under the Trump administration have taken a lighter touch, which has sidelined the importance of the compliance officers’ role.

In some instances, like the so-called Volcker Rule that was designed to prevent certain types of risky trading, the rules have been rewritten to make compliance less burdensome.

Most of the compliance officers hired after the financial crisis were contract employees, and could easily make around $200,000 a year and work in Manhattan or, in Citigroup’s case, Queens, according to three current and former compliance officers.

But now, those jobs pay about 25 percent less and are farther flung, those people said.

Barclays has moved compliance personnel to Whippany, NJ, about an hour’s drive from Manhattan. Deutsche Bank’s compliance center is in Jacksonville, Fla., while JPMorgan has been hiring compliance personnel in Buffalo and Poland.

“The pendulum is all the way on the other side,” said Jack Kelly, chief executive officer of Compliance Search Group, a headhunting firm. ”There has to be problems happening down the road.”

It’s unclear how many people have been displaced, but automation and high costs of working in New York are expected to drive out even more next year, according to a report from headhunting firm Johnson Associates.

“People are looking harder than ever [at cheaper areas] — particularly with tax-law changes. It’s just kind of dumb to be here,” said Alan Johnson, chief executive of Johnson Associates.

Source: New York Post 

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  1. November 28, 2018
  2. November 28, 2018
    • December 7, 2018

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