City Diaries

In the week in which the US Federal Reserve slashed its key interest rate from 1% to a range of between zero and 0.25%, and a US financial regulatory body ordered an in-house investigation into why it did not detect a $50bn (£33bn) case of fraud sooner, our City diarists are looking to the new year and what it might hold in the financial world.

Our diaries are written by people who work in finance and have had a front row seat as their industry goes through the biggest changes in decades.

They will be giving us regular insiders' updates on the mood in the City of London and the dramatic changes in the world of finance.

MARK

Mark (not his real name) works for a stockbroker outside London.

When looking at the current crisis in the financial services industry, it is easy to think solely of London and that shining light of the UK's financial services industry 'The City'.

In the City they earn massive salaries, drive the fastest and most expensive cars, have the biggest and best houses, and probably a country retreat as well. This is probably why there has not been too much sympathy for those losing their jobs in this industry. Well that is not always the case!

There is a financial services industry outside London where ordinary people live ordinary lives and earn ordinary salaries. I am one of those people. Inevitably, the firms we work for have their headquarters in London and you often worry that being so far away means it is more likely that people sitting in those London offices will turf you out without even having met you.

In the past two weeks, we have had our annual Christmas party. It is never lavish but is always enjoyed by all of the staff. This year, the black cloud that has covered the whole industry loomed large and there was a subdued atmosphere.

It is hard to party when you may not have a job in the new year or when your colleagues have already been relieved of their duties.

We are not all bankers and it is not all our fault. I sit, writing this, worried that come December 2009 I might not have a job, and might not be able to afford my mortgage. Would I be able to keep a roof over my head? If I am out of work, can I get another job?

In the City jobs are going but there are still some jobs out there - outside London there are not such rich pickings. I contacted a recruitment consultant the other day who was listed as 'banking and financial services'. I got an e-mail back saying she no longer deals with that sector as there is no work, and now looks after education. If only it was that easy for me to switch industries!

DANIEL

Daniel (not his real name) works for the London branch of an international investment bank.

With a week to go until Christmas someone would have expected some positive end of year news. Instead, Mr Madoff decided to cut the Christmas holiday short to many of his investors, whether private or institutional.

At the same time I have heard from an acquaintance that another big City bank is planning a healthy cut in their head-count in the new year, so this has really been a week of doom and gloom.

Friends and family have also been affected with some losing anywhere between 20% and 80% of their wealth in the past six months alone. There really is nothing left to cheer about.

I met a property developer who appeared rather hopeful in telling me he believes the market will come back in six months. He told me he had a buyer for the property, and when I asked what stage he had reached he said the buyer had signed the contract. I enquired whether any funds have exchanged hands, 'not at all' he replied. I said he seemed very optimistic and I wished him the best of luck.

It made me think that small to medium property developers are still living in a dream world where buyers walk through the door every minute.

So what is left to say? I wish you all a Merry Christmas and a Happy New Year, and as my desk is lacking cards this year, hopefully 2009 will be a better year for us all.

Read Daniel's previous diary entries

CAROLINE

Caroline (not her real name) works in a High Street branch of a large UK bank.

We are all feeling the threat of losing our jobs and not just by means of redundancy. An unbelievable tactic now is to put staff on a disciplinary warning if targets are not met, but our targets have not been reduced.

Staff are so demoralised. Are they just trying to get us to quit and save them even more money? Where are you supposed to get another job in a financial institution? So many staff are going off sick - is it any wonder?

The constant e-mailing from bosses is getting tiring, they don't seem to realise we are trying our best. Apparently that is just not good enough. Some Christmas this is going to be!

Read Caroline's previous diary entries

TOM

Tom (not his real name) works in the investment industry.

Two events have caught the attention of those involved in the financial sector this week. One is a scam, which has shocked the already battered financial sector, and the other is the move by the US Federal Reserve to slash interest rates to nearly zero.

For those of us who have been through the collapse of our banks and all the anxieties that that entails, it was something we were expecting anyway.

It's almost funny when people in their mid-twenties talk about their experiences in the same way we used to hear middle-aged professionals tell us that they've been there, done that. People are generally exhausted and accept whatever might be coming in the new year. Traders who were famous for their tempers now look like they have been sedated - nothing really matters, nothing gets them fired up like it once did.

The Madoff scandal is the last thing that anyone involved in the financial sector needed. Many hedge funds look like they will take huge losses, and that is a potential disaster for funds. They were expected to be in trouble, with a third going out of business in 2009. However, the ease with which they were defrauded has serious implications. More worryingly, it seems they don't really know what they are investing into.

Perceptions are everything in this business. Rich parents send their kids to exclusive schools and universities. They end up working for banks and hedge funds because of who they are, and often rise to the top of their firms with levels of knowledge inferior to that of many people below them, who did not have the same privileged backgrounds.

I myself have seen very recently how a less than knowledgeable manager, beamed into our workplace from a mothership, gets in the way of our everyday (crucial) activities, for the sake of committee and politics.

Dear Readers, if I sound bitter and cynical, that is because I have seen peoples' dreams shattered by those who should not have been entrusted with organising drinks in a brewery, let alone the world's financial system.

Read Tom's previous diary entries

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