Esther Duflo, Professor of Economics at MIT asks if the world has too many bankers?. She’s inclined to think so but is reassuringly optimistic about talent finding opportunities in other industries although she is vague on what the relative compensation levels might be. I think finance will evolve (Glenn Hubbard explains why the long-term trends are in the industry’s favor) and new firms will fill in the void left by Lehman, Merrill et al. Bottom line is many smart people will gravitate towards the best paid industries and finance will still be competitive in that respect (even in a deleveraged form).