Here's a brief summary of the top finance and legal industry news from the past two weeks. For a more in-depth commentary on the recent J.P. Morgan settlement, the state of legal training in the UK and the transatlantic dispute dominating the accountancy profession, look out for this week's issue on stands around your campus and in your careers department.
Banking industry news
Credit Suisse fall short
After unveiling disappointing third-quarter results, Credit Suisse has announced an intended overhaul of their interest rate trading business, which has struggled for profit since increased regulation was introduced after the financial crisis. The restructuring will cut the bank's debt financing by $60bn (£37bn) and reduce its holdings of risky assets by $7bn, though some job losses are likely. Chief executive Brady Dougan said the move will allow managers to concentrate on the growing parts of Credit Suisse's business.
No sign of housing bubble
A leading member of the Bank of England's Financial Policy Committee (FPC) has stated the Bank should not be responsible for regulating house prices. The comments were made by Martin Taylor at a speech to business leaders in Wolverhampton. His announcement addresses rumours the Bank was planning to intervene in the rapidly recovering mortgage market to allay concerns about a potential house price bubble. Although the FPC will still monitor banks to ensure they avoid over-extending themselves, Mr Taylor said the FPC would only become concerned if the market became overly speculative.
US fight back against tax evasion
The US crackdown on tax evasion has led to the arrest of Raoul Weil, former head of the wealth management division of UBS. Mr Weil was arrested while on holiday in Italy and is accused of aiding tax evasion through his role with the bank. If extradited, Mr Weil faces a prison sentence of up to five years, though this could be reduced should he agree to testify about the bank's cross-border wealth management business, a possibility that will concern high-ranking employees at the bank who have denied their involvement. The case is one of many incidents of Swiss banks being investigated by the US for enabling tax evasion.
Legal industry news
Former UBS trader on trial
Former UBS trader Tom Hayes has appeared in court charged with eight counts of conspiracy to defraud with staff from at least 10 banks and brokerages between 2006 and 2010, according to Reuters.
The court heard that he allegedly conspired with 22 others to manipulate LIBOR rates. However the names of his co-conspirators were not read out in court, after the judge remarked these individuals "are people who have not been charged and may never be".The next hearing is due in December and the trial is not anticipated to take place until 2015.
US firms offer top starting salaries
A survey of starting salaries at City law firms has revealed that the average starting salary for NQ lawyers is £33,000 a year. However, topping the pay list were US firms, some of which pay their NQs up to £90,000. Lagging behind them are NQs at magic circle firms, who all receive a starting salary of around £64,000.
In terms of regional salaries, London ranked highest in terms of earnings, with salaries starting at £51,000. The lowest paid NQs were in the north-west, earning on average £27,750.
Co-operative Legal Services u-turns on training contract places
CLS, the legal arm of the Co-Operative Group has admitted that its target of offering 100 training contracts a year is no longer viable. Last year the firm announced it planned to take on more trainees than any magic circle firm, but CLS has suffered a difficult financial year, which saw it lose £3.4 million in the first half of 2013. *The Lawyer *reported that CLS only took on a mere 10 trainees, which is a whopping 90 per cent less than originally promised.
Consulting & accounting industry news
Major calls for new energy tax
Former prime minister John Major recently called for an immediate one-off tax on the profits of the major energy companies. In a speech given at a Westminster lunch, he said the amounts made by the big players in the industry in recent years were unacceptable at a time when so many people across the country are facing economic hardship. Downing Street commented that Major had made an interesting contribution to the current energy debate, but that the government had no current plans to introduce such a tax.
Chief financial officers prioritising expansion
A quarterly survey of leading UK chief financial officers conducted by Big Four professional services firm Deloitte recently has found them to be optimistic about the global economy and their companies' prospects. 54 per cent of those surveyed said that they think now is a good time to take greater risk onto their balance sheets. Cost control and cash conservation are now less of a priority, with expansion now being on many businesses' radars. Emerging markets were seen as a key source of new customers, but finding new ones in Europe was thought to be a possibility too.
Accenture to support ethical business initiative
Consulting firm Accenture has seconded a consultant to the Blueprint for Better Business initiative. The programme started around a year ago when business chiefs asked Archbishop Vincent Nichols, head of the Catholic church in England and Wales, to assist them in creating a new forum to debate business ethics. Other religious leaders supported the idea, and the organisation's first conference was held earlier this month. Blueprint for Better Business is also constructing practical principles that can be applied to real business situations and used in leadership training.