Given its performance over the past few years, investment banking doesn't look a lot like an industry in the grips of a long term growth dynamic. Nor does it necessarily look like a great place to base your long term career. However, several esteemed banking analysts assure us that this is the case.
Huw Van Steenis, head of the top ranked financial services research team at Morgan Stanley, says banks are a "play on markets and global growth," and that three things will drive their future expansion: globalisation, disintermediation, and economic growth.
"Firstly, as an investment bank, you are able to intermediate flows between Asia, Latin America and the Middle East," says Van Steenis. "Secondly, with continued constraints on lending, it's more likely that companies will come to the market to borrow and raise capital, creating opportunities for disintermediation and growth in the securities market.
"Thirdly, investment banking is a cyclical business which will pick up as the world economy picks up."
Kinner Lakhani, a banking analyst at Citigroup, also thinks disintermediation is an encouraging factor: "People are going to the markets directly to borrow money. Europe is materially behind the curve on this."
And despite the blowout in CDOs, Lakhani predicts growth from, "the increasing depth of non-cash products" (CDS instead of corporate bonds; rate derivatives instead of government bonds; equity derivatives instead of equities).
All of which suggests that the much hoped for return to hiring in 2010 may be more than merely temporary.
However, as Simon Maughan, a banking analyst at MF Global points out, what really matters for hiring is banks' own perception of the situation. In the short term, at least, this is favourable: "Banks think there will be growth. So that's all there is to it."