Answer: Growth in the investment banking industry may not have as big of an effect on the hiring on new bankers as one might initially think. Keep in mind that most hires made at the entry level (new analysts out of undergraduate programs) are simply being used to fill the gap by junior bankers leaving the industry (for business school or for jobs in other finance fields such as private equity). Industry growth may create a few incremental positions each year, but the bigger growth driver (and compensation driver) is the number of completed transactions (or the value of such transactions). This deal count or deal value tends to be tied to overall conditions in the global financial market (as an example, when stock markets are down, the number of IPO offerings falls).
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