Category Archives: London Financial Markets

Where have all the German programmers gone?

Think about it, when was the last time you spoke to a German programmer? OK OK, ignore that cool bunch of guys from AutoScout24 who you met at QCon, when was the last time you met a German programmer who lived and worked in London? Exactly. None!

One of many happy Germans

One of many happy Germans

You don’t even find any working in Deutsche Bank! Or in the queue outside Wurst on Cornhill, you’d expect that would be a good place to find some right? Wrong. Over the years I’ve tried to tempt a number of Germans with specialist skills to leave their homeland and relocate to London but I have had zero success in this area. They tend to just politely decline my headhunt call / email and stubbornly remain where they are. I did once get a German from Nuremburg all the way through to final interview with Barclays Capital – trying to do my bit for Germano-English relations – but unfortunately it fell through at the final stages.

I was on the Oxford Tube at the weekend and sat next to two Germans, one BA and one Java developer, and I asked them what the deal was. They confirmed what I had suspected, that in the main they are all very happy in Deutschland.

We agreed that a lot of it came down to economics, Germany is rich country and for a like for like position they could probably expect either similar or maybe even less pay in London. Consequently there is a vibrant market for programmers and lots of interesting work available. There is also a high standard of living across the black, red and gold country.

Not going anywhere

Not going anywhere

We discussed whether or not it was the old North / South and East split in the EU, as the Southern and Eastern European countries are well represented in London. But France, Netherlands, Belgium and to a lesser extent Scandinavia are well represented here.

They also don’t seem to be drawn to the big cities and just as often live and work in small towns. There doesn’t seem to be a culture of wanting to live and work in an international environment, whereas I find the French, Dutch, Belgians and Scandies have a strong culture of seeking an international life experience.

So come on my lederhosen-clad, sausage-chomping friends come over to London and share in the wonderful experience of living in the truly international city that is London.

Hedge Fund Exodus?

Movement of rich people

Exodus - movement of the people

News this week is that everybody’s favourite economy stimulator, the EU, is now looking at legislation that will curb bonuses in the hedge fund and private equity business.

Here’s the link, but basically the Stasi ESMA (European Securities and Markets Authority) have realised that banker bashing only targets one section of the financial markets and that there are other “senior executives” in London whose pay they want to “bring in-line” with the remuneration policies of the investment banks.

This is another totally unhelpful attack on the UK economy from EU, and if they go ahead I can see many funds simply upping sticks and relocating to the Caribbean or the Far East. Many funds are already domiciled, or at least partly based in offshore locations, and a vicious grab on their pay is simply likely to push them further abroad faster. The Government apparatchiks just don’t seem to understand that today each country is like a camping-site: they provide a patch of suitable ground and some basic amenities but ultimately you can pitch your tent anywhere. In the UK we are lucky to have one of three of the world’s leading global cities and we need to realise that this is precious thing and not some entitlement that can be abused according to the latest Brussel’s fad.

Now the FSA is trying to work out how these rules could be applied to the UK, so watch this space.

A Brave New Banking World

A Brave New World

A technologist I am currently working with tried to post this as a comment on my previous post – I couldn’t work out how to get it on the comments either, but I thought it was posting here:

Indeed, the entire banking sector is recovering. However, several aspects need to be taken into account before being truly optimistic:

 – the regulatory landscape is very different from what it was 5 years ago, and is now imposing new capital requirements which will prevent banks from massively investing in growth

 – clients have been showered with risk suddenly becoming reality. The volumes in equity are still well below what they were before the crisis. They may never come back.

 – more regulation, more risk management, more automation (to cut operational cost) means more IT, meaning that many open IT roles may  simply reveal a change in staff balance, rather than a global recovery. 

On the regulation front I would add that the burden of regulation comes in two forms: less profit and the obstacles it creates for the business

Good news for the start of 2013

I’ve got a feeling that despite all my gloomy predictions at the end of last year, 2013 is going to be a good year for the City of London. I started to think that things might not be as bad as I had thought they would be when within a few days of being back in the office we started to get some interesting roles being released. Now, 17 days into the year we have about as many live roles now as I did at my busiest period at any point last year.

A healthy number of roles is always a good sign, but IT recruitment tends to be a “bellweather” for how the financial markets are doing, as opposed to an accurate indicator. For instance lots of roles in January could just be a sign that it’s the New Year and companies wanting to test the market to see what the quality is like, rather than actually having a need to hire.

Good news from the States means good news for us

But there has actually been some low level good noise floating about since the summer, I refer mainly the Oil and Gas boom in the USA. Their enthusiastic adoption of “fracking” has revolutionised their national energy landscape, which is going to help their economy recover, leading to surprising stories that the US is now a net exporter of oil and that they expect to export more oil than Saudi by 2020 flying around.

The US economy is flying

Then last week I read this article in the BBC news Bank of America to pay Fannie Mae billions to settle mortgage claims. Now that Bank of America, Citigroup, JP Morgan and Wells Fargo have settled their dispute with the US Government (Fannie Mae), the toxic debts they acquired in the lead up to 2007 / 08 will have been cleared off their liability books, which will improve their balance sheets at a stroke, meaning that they can now lend more, pay more dividends and be in a stronger position for the banking standards currently being implemented (i.e. Volcker and the rest of Dodd-Frank). Now they don’t have set aside so much capital to meet these liabilities many of the banks can start chalking up bigger profits.

And today the front page of City AM sees JP Morgan announce, alongside Goldman Sachs, that profits are up 12%. And even better news was that Goldman Sachs recorded a 19% rise in total revenues in 2012. As these two top investment bank do well, we should start to see the other banks also starting to do well. And with all the cost cutting the banks have been doing since 2011, they should be in a place where profits can come quite quickly.

Which can only mean good news for Java developers in the City of London and Finance Technology recruiters like myself. Hopefully this recent spate of jobs will be the beginning of a more successful period than recent years!

On an aside I just can’t help but think what a shame it is that whilst the US banks have been able to sort themselves out, the UK still seems to lag behind. How long do we have to wait for our own banks to move on from the quagmire of 2008?

My predictions for the Java development market in 2013

It appears that in 2013 the economy will continue to remain largely flat, with hiring continuing at the same slow rate that we saw in 2012. This year we saw hiring driven largely by regulatory changes, replacement of contractors by off shore and permanent resources, a rise in specific-tendered-for consultancy work and a limited amount of strategic projects driven by long-term, global business decisions.

In 2013 a number of high profile banks will be recovering from regulatory fines levied in 2012 and it looks as if we are yet to see the full fall-out from the Libor scandal. July 2013 will see the new Governor of the Bank of England, Mark Carney take control of Threadneedle street, I don’t know much about his approach but I have heard that he doesn’t like QE and that he is also likely to increase the base interest rate during his tenure.

So not great news to bear in mind during the festive season, but probably no surprise to anyone as no one has really been predicted a massive improvement in the economy in 2013. It is interesting to reflect that when the economy crashed in 2007, there were some hard-to-believe predictions that the economy would take 10 years to recover, 5 years later and it doesn’t look so hard to believe. Saying that I have started to hear that things will look very different in 2014, and that despite any national economic predictions, the City might well do very well indeed…

It is worth bearing in mind that every market has its winners and losers, and some people will be making lots of money this year, so my overall advice to Java developers for 2013 is to get your CV ready, so that you can capitalise on good opportunities when they come along.

My tips for 2013:

THE GENERAL RECRUITMENT SCENE

• Offers have been largely flat this year, so make career choices that will pay off in the long run rather than the short term. Opportunities that will increase your technical portfolio, your business skills or project management experience will all help your career to continue to develop during these difficult financial years

• If you have a want to achieve a big pay rise – say you believe you are being paid about 10 – 20k less than your market worth – you are unlikely to achieve it with one career move. HR and procurement are looking closer than ever at percentage increases on basic salary / daily rate, and large increases are becoming much rarer. So making a strategic move in 2013, with a view to moving on again the year after, will be more likely to get you where you want to be, rather than simply waiting for the economy to pick up in 2014

• Many budgets will continue to remain flat and BAU work will reign. This will make opportunities to work on greenfield projects will hot property

• The contractor share of the developer market will continue to suffer as employers continue to look to make savings by hiring permies and outsourcing.

• 2012 was not a good year for experienced developers in general, be they contractors or permies, with juniors being in especially high demand. I don’t think 2013 will see any change

• Offshoring and nearshoring will continue to increase, with countries like Poland and the Ukraine being the main beneficiaries, whilst Hungary, Romania, Israel, Vietnam, India, Singapore, China and Russia also benefiting. A knock on benefit of this will be continued demand for dev managers with offshore and Agile experience.

FINANCIAL REGULATORY REFORM

This year we have seen more a dramatic increase in stringent regulatory requirements coming from Dodd-Frank, Basel III and the FTT, I think a rule of thumb will be:

• The French Financial-Transactions Tax (FTT) or “Tobin Tax” is threatening to wreck the Euronext market, and therefore much of the UK high frequency trading market, taking a large chunk of UK revenues from FX and equities trading with it

• Basel III will wreak serious damage to the fixed income business, as new capitalisation rules mean many bank’s revenues from fixed income trading will be down

• Dodd-Frank will seriously limit the ability of the investment banks to make money out of derivatives products and exotic swaps (continuing to reduce the effectiveness of the OTC derivatives market)

HOT TECHNOLOGIES

• Java 8 will be released in the summer providing Java developers with the ability to write Lambda expressions into their code for the first time, a feature that has been widely enjoyed by C# developers since 2007. Java 8 will also include the final components of Oracle’s new Rich Internet Application package “JavaFX” which was otherwise released with Java 7

• 2012 now looks like it was the year of Big Data and NoSQL, and I expect both technology veins to continue to do well in 2013. Both were picked up to varying degrees by the financial markets and were largely used for their analytics features in response to regulatory reporting requirements

• Scala is still gaining in popularity with many developers in the City having learnt it in their spare time and 2012 saw an increase Scala projects led from top down. I suspect the trend will continue in Scala’s favour over 2013.

• Adobe’s CQ5 UI suite really took off in 2012 and I suspect it will continue to do so in 2013.

• HTML5 is now practically considered an industry standard and will continue to solidify its position in 2013

• Mobile and web applications will continue to grow in importance in 2013 – I don’t think this market has reached its potential by any stretch. As security measures improve for iOS we will continue to see increased utilisation of smart phones and tablets for business purposes by sales teams, portfolio managers and traders

That’s all from me for 2012. See you in the new year!

Ludwig Wittgenstien, Alan Turing and the market

If all these PhDs are knocking about in the financial world, I wonder to what extent the quants the chasing the market and the market is chasing the quants.

Answers on a postcard please.

Contract Java roles!! Are we finally seeing the pick-up we predicted for September

I have had multiple contract roles come out for 2 major investment banks in the past 24 hours.

Hopefully that will put an end to all of my doom-mongering over the last few months!

What matters to a junior Java developer?

I have been doing a lot of work with junior Java developers recently and as such have spent a lot of time trying to work out what their priorities are when considering a new position. (Note: I would consider a developer “junior” with anywhere up to 4 years experience, probably someone making their first or second career decision. Anything experience beyond that and I think it’s fair to say you can no longer be considered “junior”)

1. Where the company sits compared to other organisations in the Financial Markets
2. What the company culture is like, and whether the colleagues are a team of “nice people”
3. The technical standard of developers at the company
4. What opportunities there are to learn and for career progression
5. What they will be doing on a daily basis
6. What business skills they will learn

Perhaps surprisingly I have found that point 4 (“What opportunities there are to learn and for career progression”) is actually the least mentioned point of importance when initially thinking about making a decision. Normally I find I am bringing this point up and then explaining what each opportunity might lead to in the long run. However once you bring it up it tends to be something they take it on board, but still few junior developers have brought it up on their own. Points 2 and 3 are probably the most commonly cited as being important.

What is wrong with these people?

I was reading the front page of CityAM this morning and new head of the FSA FCA Martin Wheatley has said he will take a “shoot first and ask questions later approach to regulation”.

What is wrong with these people???? Can’t they see that the current level of regulation is stifling the national economy? The financial services  industry drives London’s economy, London’s economy drives the rest of the county, ergo we need to be super-charging financial services not appointing swivel eyed bureaucrats to heap more red tape on our struggling recovery.

What is happening to the financial IT contract scene?

Will things ever be the same again?

In this recession some people continue to do well, some people are just bobbing along as usual and some people are really struggling. In the main this final diagnosis applies very much to IT contractors for the big banks.

Things were starting to look bad at the start of the year when it became clear that certain banks were actively stopping the renewal of large numbers of contractors (HSBC was one of the first in January). Some of this may have been a natural result of the fact that certain banks have 2 year limitation clauses on their contractors’ contracts and a lot of hiring was done in 2010, but with the economy continuing to flatline it begins to look more and more like the banks are making actively trying to reduce their manpower expenditure.

Then in May and June en masse cuts began. Deutsche Bank, RBS, Goldman Sachs, Barclays Capital started putting legions of contractors on notice. Most of these guys are still around, kicking their heels waiting for the next contract.

Are things really that bad?

In some ways yes. The question is, have we seen a paradigm shift away from contracting towards permanent members of staff? In the long term, no. I don’t think so. When the banks are making money having a section of the employee base which is highly skilled and highly mobile is very useful to the banks, and that hasn’t changed. In the short term it’s the steadily increasing level of regulation, increased capital requirements and general global economic melancholy that means that a £600 a day Java developer looks much less attractive than an AVP on a £65k base. And to make things worse for your career contractor most team leads report that many contractors take a box ticking approach to their daily duties and clock off on-time, everytime.

I have to say that things are the worst for developers with Winforms and Swing specialisms. My advice is get down to Skills Matter and upskill with something modern (Flex or HTML5 anybody?) as soon as possible.

What is happening to rates?

For the first 6 months of the year contractors who were getting new contracts managed successfully kept their rates high, perhaps only seceding £50 or so on their rate. Some of which I believe is down to the Government’s restriction on Tier 1 visas. For BAs and PMs my colleagues report rates falling more dramatically to 500 or just below. I expect the new round of contract positions we are expecting (hoping for) later in September to continue that trend of pushing rates down.

I had lunch with an old contact of mine yesterday who used to be a contractor but successfully made the transition to perm 3 years ago. He told me he thought that it was inevitable that, painful as it may be, contractors would have to start to accept lower rates, as he told me “I may eat with a spoon but I do eat”…