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Trading is one of the industries where personal contacts and knowledge are the most important, whereas "hard" capital is quite easily replicable ; any large enough bank can provide the financial capital. The way traders got huge bonuses is by theatening to quit and join another bank ; this was usually done by the head of a trading desk, threatening to leave with its whole team. A trading desk leaving a bank and being hired more or less intact by another bank can take the customer base with it, and the profits that go along with it. There was sociological work on this by Olivier Gaudechot, a French sociologist ; I don't know if he has been translated.

The same kind of reasonment applies to Merges and Acquisition bankers...

Un roi sans divertissement est un homme plein de misŤres

by linca (antonin POINT lucas AROBASE gmail.com) on Wed Feb 4th, 2009 at 05:19:09 AM EST
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