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Juniorization: While investment banks have cut compensation costs by 21% on average since 2009, they've only made staff cuts of 3% in the same time. Companies have been increasing their employee retention efforts initiative to improve the work-life balance of its more junior bankers. Once able to attract young talent with a large salary alone, banks must compete with the technology industry and other areas of finance that offer young workers competitive salaries but also allow or even encourage a better quality of life. But more than that, banks need young people because they're cheaper – better for shareholder returns. They're realizing that many of their more senior and highest-paid employees are less crucial for bringing in revenue and the "juniorization" of its workforce will be better for the automation and digitization of its business – many teams can be built with younger, less experienced people getting smaller pay packages. Recently, Morgan Stanley began offering paid sabbaticals and JPMorgan Chase introduced a relaxed dress code, allowing business-casual attire. In Europe, Credit Suisse is encouraging its employees to take off Friday nights and Saturday mornings and UBS is urging its workers to reserve two hours each week for personal business. Wall Street Journal, Financial Times

Wall Street Journal

Online marketplace lender Vouch Financial is shutting down. The San Francisco-based personal loan startup launched in 2013 and has raised $11 million in venture capital. Vouch required its borrowers to seek sponsorship from friends or family, who would put up some collateral, hoping it would help ensure borrowers repaid their loans. Vouch made $1 million in loans through last August, but loan volume overall didn't take off as it did at its larger peers like Lending Club or Prosper, both of which lent several billion dollars last year. The online lending industry has already been reporting slowing investor demand for loans or drops in lending volume this year.

HSBC Holdings has restructured its investment banking arm, pushing out some senior bankers in an effort to cut costs and "bring together product and sector teams". The changes were announced Monday in internal memos and included the appointment of regional co-heads for global banking and announced a new advisory group bringing together M&A and corporate finance. HSBC is also combining other groups and activities with overlapping clients.

Financial Times

Small U.S. banks are urging regulators to be tougher on fintech startups, which they believe have had the advantage of operating without the post-crisis regulatory burdens imposed on legacy banks. A letter from the Independent Community Bankers of America challenged the strength of some fintech businesses and requested they be fully regulated – a reflection of traditional banks' struggles to attract younger, more digitally oriented customers. "ICBA believes that the recent problems that some of the online marketplace lenders have experienced with liquidity and earnings, as well as with compliance, makes it important that these lenders be subject to safety and soundness supervision and regulation," the letter said. Fintech companies have rejected the idea that they've thrived in a regulatory vacuum, holding that like any other firm, they too must operate and comply with existing rules on activities, such as consumer lending, debt collection and credit.

New York police are improving their response time to crimes with a "mobility initiative" it says has been funded by foreign banks' penalty fees. Authorities in New York City have wound up with millions of dollars in forefeited funds from banned transactions that ostensibly violated U.S. sanctions on countries including Iran and the Sudan. The Manhattan district attorney has given $90 million from HSBC and Standard Chartered penalties to the NYPD to purchase smartphones and tablets for policemen and police cars; the mayor's office added $70 million from a settlement with BNP Paribas.

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