Investment banker admits: we overcharge
On the FT’s letters page, Robert Pickering tackles the familiar theme of bank profits and bonuses. The reason banks pay their employees so much, he argues, is because they make large profits. But why are their profits so large?
The real marvel is that customers, both corporate and institutional, continue to be willing to pay so much for essentially commoditised services in a ferociously competitive marketplace served by multiple providers, thus generating these outsized profits.
What the FT fails to mention is that, until a year and a half ago, Pickering was chief executive of JPMorgan Cazenove, the London arm of the great House of Morgan. In other words, someone with intimate knowledge of the City of London’s inner workings is saying: we charge too much.
Pickering’s next job will presumably be in a different industry. I wonder what his successor has to say on the matter?