1,600 jobs go at Morgan Stanley

Latest bank to cut back.

Morgan Stanley is about to cut 1,600 jobs in an effort to cut costs.

This is about 6 per cent of the total headcount at the targeted section of the bank - the institutional securities group - which raises money for corporate lending and mergers.

Here's the FT:

Morgan Stanley will begin informing employees affected by the job cull in the coming days and weeks. A large slice of the trimmed positions will include highly paid senior bankers from the ranks of managing directors and executive directors.

Pay and bonuses for bankers “comes down because the amount of people in the business comes down,” Mr Gorman said in the FT interview in October.

Even with the additional cost-cutting, Morgan Stanley is targeting a much more modest return on equity than the pre-crisis levels of as much as 23 per cent. RoE is a key measure of a bank’s ability to make money for its shareholders.

“We’re generating 5 per cent, can we get back to 10 per cent? That’s much more interesting to me than can we get back to 15 per cent or will we ever get back to the glory days – those are completely flawed anyway,” said Mr Gorman.

We've already seen cuts at UBS, Citigroup, Deutsche bank and Credit Suisse  - and Morgan Stanley seems the latest in the series. The cost-saving measures have followed new regulations that have restricted the banks' activities.

Morgan Stanley will cut 1,600 jobs. Photograph: Getty Images
Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.