European M&A deals are down a further 22% for the first half of 2002 and equity issuance is even more scarce. But the most optimistic of investment bankers have realised that a return to a steady pipeline of mandated high margin advisory transactions is likely to be years, rather than quarters, away. Combined with high compensation ratios through over-valued packages and existing retention guarantees, there are unsurprising questions hanging over compensation, strategic focus and current business structures.
Few need to be reminded â we've been here before. After 1987 the new cry was all about a return to relationship management values in investment banking and away from the transaction focused hedonism of the previous years. This period too had its scandals: Maxwell and the BCCI affair, the Enron and WorldCom of their day. Reputations were questioned. Regulatory regimes were back in the spotlight. Meanwhile, bonuses were slashed and 17% of the work force were let go from City firms. Sounding familiar?
