Thousands of jobs shed as global pressures on banking sector starts to leave its marks
Global investment banks are shedding tens of thousands of jobs as falling interest rates, weak trading volumes and the march of automation create a brutal summer for the sector.
The Financial Times reports that since April, almost 30,000 lay-offs have been announced at banks. These include HSBC, Barclays, Société Générale, Citigroup and Deutsche Bank. Most of the cuts have come in Europe, with Deutsche accounting for more than half the total, while trading desks have been hit hardest.
In New York City, jobs in commodity and securities trading fell by 2 per cent in June from the year before, a loss of about 2,800 positions, according to the New York Department of Labor.
Bank executives are under pressure from investors to cut costs and protect profits. Since long-term US interest rates began to fall in November, the KBW index of US bank shares has fallen 5 per cent, while the S&P 500 has risen by 6 per cent. The Stoxx index tracking European banks has lost 16 per cent since November to hit a three-year low.
While the reasons given vary from bank to bank, there are signs that deeper trends, such as the increasing pile of debt paying negative interest rates, are forcing the sector to shrink.
Read More on the Financial Times