The news that some 28,000 Credit Suisse employees in Switzerland will receive no pay rise next year will not worry many investment bankers in Wall Street or the City. But perhaps it should. Many feel that the Credit Suisse move is a sign of things to come in banking as a whole and bankers may soon have to face the prospect of little or no pay rises next year. This may be painful as 2002 bonuses are likely to be down on even last year.
The smart money is on many investment banks, and indeed fund managers, capping most salaries next year in view of the outlook for earnings and the markets. Any pay rises will probably be nominal, although junior staff are thought more likely to receive an uplift.
With 2002 bonuses thought to be significantly down on even last year's depressed levels, the next few months could be tough for any employee lucky enough to still be in a job.
Although 2003 is also likely to be a difficult year for the City and Wall Street, many feel that employees will at least receive a better bonus at the end of that year. Bonus pools are likely to be bigger and staff numbers will undoubtedly be smaller as more lose their jobs in the first few months of the year. In the meantime, bankers are well advised to tighten their belts if they have not already done so.