[annakerina]

I was recently told that all the IBs will be phasing out housing allowance for their staff in 1-2 years' time in HK such that the effective post-tax pay works out to around the same regardless of where you work- nyc, hk, singapore, shanghai...

Is that true? I find it hard to imagine many of the bankers accepting this, with the depreciating hkd and now no housing allowance.

[jimbo]

Oh come on IB's have had it good for so many years now and because of the credit crunch where your employers are belt tightening its only fair that they reduce expenditure and perks, Better to be in a job without housing allowance than unemployed isn't it?

Its not exactly as if you guys are on the breadline is it?

[annakerina]

doesn't sound like it's just because of the credit crunch. seems like they want to change the rules of the game in terms of housing allowance.

[hello_there]

Have heard of this somewhat, but certainly not a complete phase out and the cuts that I have seen so far aren't affecting people who have been in the game for more than 5 or so years (some new US hires are getting lower allowances lately, but still not bad). The day they cut my husband's housing allowance is the day we leave HK. It wouldn't make financial sense to suck up the housing bill and with the fam and pets its not feasible to live comfortably in a smaller place.

[Hamton]

Well, the investment banks did kind of cause the entire credit crisis and help spin the world into an economic downturn, so I doubt anyone's going to be too sympathetic now that the expat investment bankers are losing their generous housing allowances and fat bonuses.

I don't mean for this post to come off utterly anti-investment banker, but... well, if you take the glory during the good times you've got to be prepared to be kicked in the balls during the bad times.

[ocean13]

Hi Annakerina, I have to say it depends on the institutions but it is more likely to affect junior staff than senior. In one or 2 years's time, the market will be back up and, should the banks need staff in Asia, they will have to include housing allowance.

[freeier]

interestingly US and Europe are cutting heads..
so we are receiving tonnes of CVs in asia.. of ppl wanting to move here etc.etc..

this is capitalism.. when there are more supply, the price will fall

[Zenon]

If your housing allowance is a contractual entitlement your employer may not be in a position to simply 'cut' it unilaterally. This obviously depends on the wording of your employment contract. So check it.

[limepickle]

in fairness, the crunch was just as much caused by consumers taking on debt they couldn't afford to service - having been sold inappropriate financial products from commercial banks / mortgage sellers etc. or told by shoddy IFAs that 'their house will never go dwnn in value'

in my humble opinion

Originally Posted by Hamton

Well, the investment banks did kind of cause the entire credit crisis and help spin the world into an economic downturn, so I doubt anyone's going to be too sympathetic now that the expat investment bankers are losing their generous housing allowances and fat bonuses.

I don't mean for this post to come off utterly anti-investment banker, but... well, if you take the glory during the good times you've got to be prepared to be kicked in the balls during the bad times.

[Hamton]

Originally Posted by limepickle

in fairness, the crunch was just as much caused by consumers taking on debt they couldn't afford to service - having been sold inappropriate financial products from commercial banks / mortgage sellers etc.

But the lenders are as much to blame for lending large sums of money to people who couldn't afford to pay it back once the rates increased.

True, both are to blame to a certain extent, but the lenders should have really known better.

60 Minutes did an expose on this a few months back, where it was generally agreed that the problem was due to the irresponsible lending practises, and the lenders then selling on their risk to other institutions with no one actually bothering to check the facts (such as giving people mortgages 10 times their actual salary at artificially low interest rates).

It's hard to have sympathy for the banks really. They knew exactly what they were doing here, unlike some of the unwitting victims.