A decade since the collapse of US investment bank Lehman Brothers, Morgan McKinley’s Hakan Enver looks at whether the impact of this failure was worse than the challenge of Brexit.
15 September 2008 - just over a decade ago - marked the collapse of investment bank Lehman Brothers, which sparked a financial crisis that triggered shock waves across the globe, devastating individuals from all walks of life. Generations learned, overnight and in the most terrifying manner, just how deeply connected financial services are with every facet of our lives.
From foreclosed homes in Florida and to soaring childhood poverty in Greece to job losses across the board, recovery has been mixed for businesses and individuals alike. In the blink of an eye regulatory departments went from sleepy backwaters of financial institutions to the stewards of the frontlines.
A look back at data from 2004 onwards shows the impact of the Bear Stearns bailout in March of 2008 - six months before the Lehman Brothers collapse - setting the stage for the economic crisis. In the years following the collapse of Lehman Brothers, a series of stressors contributed to peaks and valleys in City employment. Remembering the devastation of the Lehman Brothers crash helps put our current situation in perspective. It was a much more treacherous storm to weather than Brexit.
Indeed, the historic data also show that Brexit in 2016, as well as the 2015 general election, triggered an initial spike in hiring in the Square Mile, only to decline shortly thereafter for an extended period of time, though both were less devastating than the loss of Lehman Brothers.
Only time will tell how fully we’ve absorbed the lessons of the 2008 crisis. The 14-year trend shows how far the volume of jobs dropped post 2011. Clearly, the impact of Lehmans has had a devastating effect on hiring numbers. Teams shrunk in size and more people were having to search for new employment. This is indicative of the increase in candidates searching for new positions between 2009 and 2011.
As markets stabilised, the number of job seekers dropped considerably and it wasn’t until 2013 that confidence in searching for alternative vacancies trickled back. To some extent, much of this was a result of many financial institutions having to hire aggressively within their regulatory departments.
Hakan Enver is managing director at recruitment consultancy Morgan McKinley.
Article available at:https://www.icaew.com/en/groups-and-networks/local-groups-and-societies/london-ds/london-accountant/career-and-development/nov18-morgan-mckinley
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