Many top traders and bankers have left the financial giants for rivals. The trend may continue as long as Citi and BofA remain under the government's thumb.
NEW YORK (CNNMoney.com) -- The so-called brain drain that big banks have worried about ever since the government stepped in to bail out the financial sector appears to be well underway.
And nowhere is that pain being felt more acutely than at Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500), the two banks that have received the most aid from the government and are subject to the most onerous restrictions on executive compensation
Exact figures about the number of departures from Citi and BofA are tough to come by. But Citi chairman Dick Parsons conceded at an economic forum last week that management has had to use terms like "patriotic duty" and the potential of doing "fascinating" work to convince people to work for the embattled firm.
"It is normal but it is exacerbated by the fact that those who are stuck in TARP can't compensate their people as well those who aren't,"
For months, financial firms have railed against proposed compensation caps, warning it would prompt an exodus of workers at firms that remain under the government's thumb to smaller rivals, foreign banks and the lightly-regulated worlds of private equity and hedge funds.
But last week, the White House proposed to limit bonuses at Citigroup and Bank of America for their top 100 salaried employees, who's compensation will now be set and scrutinized by the newly appointed "pay czar"...
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