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We've heard a lot about job losses in investment banking in the last few weeks, but not much about headcount reductions in investment management. Until now. The Wall Street Journal reports that, according to unnamed 'people close to the firm', up to 200 staff at Fidelity Investments will be laid off imminently. The firm's new President, Rodger Lawson, has said that one of his main tasks is to rein in costs.
And the axe continues to fall over at Bank of America's (BofA)investment banking unit. Stephen Ketchum, the global head of media banking, was fired earlier this week, along with 7 of his 30-man team. Other junior financial institutions bankers are also said to have got the chop. In the meantime, BofA CEO Ken Lewis has been reassuring all who would care to listen that, despite putting the axe to the investment bank, he is committed to investment banking. At a dinner Thursday, Lewis said that 'I want to be very clear on that point.....We started building these capabilities 20 years ago because we believed that clients needed us to be able to provide a wide range of products and services'. (Not sure those 3,000 heads that you are chopping will think much of your committment, Ken).
Finally, The Journal also reports that US regulator The Securities and Exchange Commission (SEC) is thought to be looking into the possibility that Merrill Lynch may have 'engaged in deals with hedge funds that may have been designed to delay the day of reckoning on losses'. The Times reported earlier this week that the SEC was looking to see whether Merrill have have misled investors about the true nature of its credit losses - in early October the firm came out and flagged up asset write-downs of $5bn, only to increase this to some $8bn a couple of weeks later when posting its third-quarter numbers.
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