The decline and fall of banking’s barrow boys

Before the ‘Big Bang’, which led to the deregulation of financial markets in London in the 1980s, the city was dominated by two types of person: the often Oxbridge-educated spreadsheet warriors who ran merchant banks; and the ‘barrow boys’, students of the school of life who worked as traders. While the former are still thriving in London, the latter are now something of a rare breed. It’s a pity.

What the barrow boys lacked in formal education, they made up for in exuberance. Often the children of market traders who put their quick maths to use on the trading floors of the City, the barrow boys came to epitomise the excess of the 1980s. Yet many former barrow boys look back at that decade – a time when the city of London was undergoing radical change – with fondness: they remember rubbing shoulders with public school boys. These were people with radically-different backgrounds brought together with a common purpose to their own: to make loads of money. As a result, while Thatcher’s deregulation has been blamed for all manners of ill, the 80s were, in fact, a period of high upwards social mobility. Crucially, it was an era before degree requirements and professional exams locked out the barrow boys. Nowadays, the advent of increasingly stringent academic requirements means the City has become a place which favours insiders. 

Though diversity has been on the tip of everyone’s tongues for many years, few are prepared to question the need for a degree in the workplace. Even students themselves are convinced that a degree is the answer; the more than 1.4 million British students currently in higher education shows that all too clearly. However, the debt burden and opportunity cost of doing a degree is off-putting to some, meaning that if a job requires a degree, the pool of applicants has already been narrowed down.

With the days of a ‘gentleman’s Third’ now long gone, nearly half of all UK employers require a 2.1 degree. Inside the Square Mile, the vast majority of employers demand one, often from a top university, and sometimes even in specific subjects. Indeed, it is newsworthy when a company drops the requirement, as was the case with both Santander, in January, and PwC, in 2022. Given that graduates, particularly those from the best universities targeted by the top financial firms, are generally better off, all this implies that a lot of hires come from the same backgrounds.

While finance was a high-growth emerging industry back in the 80s, it is now a more mature one, with thousands of students competing to get their foot through the door. By focusing not just on students with a degree, but specifically on students with certain degrees, they give people the opportunity to game the system. This, in turn, benefits those in the know. Given most people make their degree choice at the age of 17, you have to already know enough about finance to choose the right degree, or you risk taking yourself out of the running at the start.

The endless forums on sites such as Wall Street Oasis show this desire to game the system. Posters argue about the precise merits of each university, delicately weighing up whether it would be better to study economics at LSE or Cambridge. On another, a hapless undergraduate questions whether they might stand a chance of breaking into finance if they went to a ‘non-target university’.

LSE is particularly successful at funnelling its progeny into the city, with 21 per cent of all students graduating in 2019/20 heading into finance, and 44 per cent of their economics graduates and 72 per cent of finance graduates finding themselves working in the sector. While the many internships and long studies of the European finance graduate were once the subject of derision, if those online forums are anything to go by, British students are increasingly going the same way.

In many ways, this homogeneity is both the symptom and a cause of Britain’s current economic quagmire. Faced with a dwindling graduate premium, students are, quite logically, trying to secure the best-paid jobs out there. Given that jobs in investment banking can pay £70,000 in the first year, with jobs in trading generally similarly well-paid, it is hardly surprising that students are doing everything they can to get their foot in the door. Goldman Sachs reportedly gets approximately tens of thousands of applicants a year.

But for the students who are actively removing themselves from the race at the age of 17, the gleaming skyscrapers of the city will forever be beyond their reach. The system favours a small group of well-informed teenagers who are set on trying to fit into a mould dictated by monolithic HR departments.

While a lot of barrow boys tell tall tales of long lunches stretching into the evening, they also talk about the energy and sense of community they felt at the time. Though the City had its fair share of public school boys in the 80s, many agree that the focus on degrees has meant some of the vibrancy of the industry has been lost. The question now is: how many of those who made it big in the 80s would be there today if they’d had to be in the know at 17?