The revenge of the retail banker
The appointment of Ross McEwan as chief executive of Royal Bank of Scotland (RBS) marked the latest phase in the return of retail banking to center stage.
Retail banking – roughly speaking, the sort of everyday banking that ordinary customers and borrowers on Main Street come into contact with – was a bit like a boring uncle at a flashy investment banking party during the boom years for risk. Investment banking, which includes areas like mergers and acquisitions (M&A) and trading on stock exchanges, seemed to be where all the smartest graduates went and all the growth happened.
Traditionally, the two were kept largely separate, with laws like the U.S.' Depression-era Glass-Steagall legislation enshrining the importance of keeping ordinary savers' cash safe. Its repeal helped usher in an era of M&A between banks which created some of the world's biggest financial behemoths, dubbed "financial supermarkets" by some.
Now, with 2013 shaping up to be the worst year for M&A since 2009 and trading volumes continuing to shrink, the focus on retail banking has sharpened.
(Read more: Barney Frank on Glass-Steagall)
Governments around the world, including in the U.S. and U.K., are discussing separating retail from investment banks. The perception that ordinary people were too exposed to risk during the credit crisis by the "too big to fail" banks which comprised large retail and investment operations helped bankers from the retail side of banking rise to the top.
Antony Jenkins' appointment as chief executive of Barclays after the departure of Bob Diamond, one of the most recognizable faces in investment banking, was an early example of this. As with McEwan, his promotion was welcomed by the U.K. government (which owns a majority stake in RBS).
Bosses weaned on retail banking seem less likely to take hefty bonuses than their investment banking counterparts. Both Jenkins and McEwan have waived theirs for this year already – although this may also be a sign of the changing climate and attitudes towards bonuses in general.
(Read more: The future of banking)
Yet the investment good/retail bad dichotomy may prove to be as misleading as some of the products which led to the credit crisis. Banks have plenty of problems at their retail operations too, after all, and some of the high-profile victims of the credit crisis, like Countrywide, were essentially retail lenders.
This may be a good decade to be a retail banker, but that doesn't mean investment banking's time in the sun won't return.