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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Once upon a time, you used to be able to judge the state of the banking industry by walking around and looking at neckties.
Ever since the first “casual Fridays” in the 1990s, investment banks seemed to have this pattern of relaxing their dress code during bull markets and then going back to insisting on suits and ties when revenues contracted.
So as the dotcom bubble built up, Wall Street looked a bit like this:
But a couple of years later, everyone was back in suits (and not just because they were on trial for fraud).
By 2006, things had changed once again, only for the Great Financial Crisis to whipsaw business-casual bankers. By 2010, UBS was giving its bankers instructions about their underwear.
And then the cycle . . . kind of ended. People just stopped wearing ties, and suits gradually followed. Nowadays if you see someone wearing a suit and tie in an investment bank, they’re either very young, very old, attending a conference, or about to ask for your security pass.
It might have been thought that “remote working policies” could play the role of the dress code in the new post-Covid market. There’s a similar combination of psychological and economic factors.
On the one hand, difficult markets produce a sense of helplessness in managers, which they try to compensate for by reaching out for things they might be able to control, like their employees’ clothing. On the other hand strong revenue conditions tend to be associated with tight labour markets, which make it difficult to cut back on workers’ perks.
That’s why it’s very interesting to see that JPMorgan is rumoured to be planning a move to “five days in the office” in the next few weeks. As Bloomberg reported last week:
JPMorgan Chase & Co. is preparing to tell all its employees to return to the office five days a week, ending a hybrid-work option for thousands of staff and returning to the attendance policy that was in place before the pandemic.
The largest US bank, which employs more than 300,000 people globally, is expected to announce the change in coming weeks, replacing an existing three-day mandate for many of its workers, according to people familiar with the matter, who asked not to be named discussing unannounced plans.
The decision, which could still change, would expand existing rules announced in April 2023 that require the bank’s managing directors to be in five days a week. About 60% of the bank’s staff — including many traders and retail branch workers — already operate under that requirement.
It would make sense to do this if you were expecting a market downturn — that was the environment in which the original “three days a week” policy was enacted after the pandemic, and in which the move to four days a week was attempted at some banks at the start of 2024. But everyone seems to be quite optimistic for 2025, and JPMorgan itself has said that it’s got a “long list” of people that it wants to hire.
So the possibilities are first, that bankers actually do love commuting into the office. Second, that the theory is all wrong and there was never any real socio-economic basis to the necktie indicator, it was just a coincidence. Third, that JPMorgan is wrong and they are not going to be able to make this policy stick.
And fourth, that everybody’s right, the indicator is reliable, JPMorgan is going to be leading the way and 2025 is actually going to be a really disappointing year.
