Back in November, we learned that thanks in part to Credit Suisse's 2000 acquisition of investment bank Donaldson, Lufkin & Jenrette, and the decision to write-down legacy assets from that deal now, the Swiss bank would likely cut bonuses by 60% this year. While individual numbers are yet to be communicated to the staff, Credit Suisse CEO Tidjane Thiam preempted what apparently believes will be a lotta bitching and moaning by employees, telling a room full of people in France today that his life would be a lot easier if certain bankers could grasp a concept small children can understand.
“The battle ground is remuneration,” Thiam said at a conference in Paris on Tuesday. “The business is structurally quite profitable provided the pay can go up and down. It’s the ‘and down’ that they don’t accept,” he said, referring to bankers in the securities unit...“A business model where you have a cyclical revenue stream and fixed salary base does not work,” Thiam told the audience that included International Monetary Fund Managing Director Christine Lagarde, Bank of England Governor Mark Carney and Bundesbank President Jens Weidmann. “And that’s the simple truth” but it “has not penetrated all the circles in investment banking and that’s what’s taking the return on equity to 7 percent.”
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