People will no longer earn more than peers in other industries simply because they work in finance.
'On any metric, they tend to be one of the most levered banks today,' Serra, a former Morgan Stanley executive, told Bloomberg Television’s Erik Schatzker and Stephanie Ruhle in Davos, Switzerland. The firm should pay less and shrink because it has too many assets that aren’t 'as profitable in the new regulatory environment.'
'The financial industry is becoming a utility,' Serra said. 'The returns will be lower, there will be less money, it will be more stable, which is what ultimately governments and, let’s say, citizens want. That means people will have to be paid less.'
That shift means that banks’ lawyers, for example, will no longer earn more than peers in other industries 'simply because they work in finance,' he said.
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