In the news

As compensation caps become a reality, do U.S. banks participating in the Troubled Asset Relief Program (TARP) face a talent drain, asks CNBC in an interview with George Davis, a consultant at Egon Zehnder International, Boston? Davis, who reports an upturn in top performers seeking fresh opportunities, acknowledges that the caps may present a danger. “A+ talent knows that there are restrictions against them and that they can go elsewhere,” explains Davis. Such individuals are now seeking positions with hedge funds, private equity firms, European and non-TARP U.S. banks. Supporters of the caps say that they will put a stop to excessive rewards for the risk-takers who sparked the recent financial crisis. However, Davis warns against blaming top talent in general for the crisis and advocates assessing individuals on a “situation by situation basis.”