Investment banks must change - FT.com Too arrogant, too self-convinced that things were correct the way they were. That is how UBS investment bank chief Andrea Orcel described his fellow bankers to UK politicians this week. Morgan Stanley boss James Gorman, meanwhile, says banking pay is "way too high." And Deutsche Bank co-chief Anshu Jain says the time for vague promises of cultural change (on pay and conduct) in the industry is long gone. The penny has dropped, even if it took a global financial crisis to jolt bank bosses from their reverie. Now they must show they can herd prickly bankers and put words into practice. Banks that have seen the secular change in their markets and given up trying to be all things to all people - such as UBS - have wisely adapted. Only those already endowed with strong franchises and scale - the likes of JPMorgan Chase and Deutsche - have a greater chance of competing on price, and surviving. But all banks are poor at losing the flab accumulated in bull markets, and it is easier to cut staff than pay. Trouble is, cuts invariably start and finish with traders in equities and fixed income, currencies and commodities areas; Morgan Stanley's latest 1,600 job cuts mostly will. But that is old school, even if it includes some of the many managing directors that widen the top of bank pyramids. Cuts rarely affect the relationship bankers who, since time immemorial, have justified their tenure and high pay with talk of brimming deal pipelines. They have also convinced everyone that ancillary business (such as UBS's $2.3bn Formula One equity private placements) would disappear without their close corporate relationships. If bank bosses really are serious, they should cut here too. Advisory boutiques, with lower overheads, can sit out the quiet spells. But investors in low-return investment banks need not pick up the tab for so many bankers on standby.