Banks put a freeze on recruitment
There is talk of job cuts in London and that some of the major banks are putting a freeze on recruitment. US banks such as Bear Stearns and Lehman Brothers are rumoured to be cutting staff by over 2,000 as a consequence of the US sub-prime mortgage crisis.
Job losses are expected in debt-related and mortgage departments according to recruitment specialists. Some anticipate job losses to affect commercial lending and proprietary trading desks, in addition to private equity business.
Furthermore, the latest report on the London economy from the Royal Bank of Scotland implies that the difficulties in the city could be having a wider effect on commercial confidence. The Royal Bank of Scotland’s purchasing managers’ index shows activity growth at its lowest for 2 years.
Banks are under renewed pressure this week as approximately £70 billion of short-term money-market loans are due to mature between now and the middle of September.
Finally, Goldman Sachs, Morgan Stanley, Lehman Brothers and Bear Stearns are to begin reporting their quarterly results shortly and these are expected to reflect heavy paper losses.