Let’s face it, Iceland aside, Ireland’s banking crisis is about as bad as it gets. It stands out as being the most drawn-out, the most home grown and having the one of the most devastating effects on the wider economy.

The cost of bailing out Ireland’s stricken banks is creeping towards €50bn, after the government pumped more money into Anglo Irish Bank, Allied Irish Bank and Irish Nationwide. Of the major lenders, only Bank of Ireland and Irish Life & Permanent have escaped government control.

The country’s budget deficit could stand at 32% of economic output – or ten times the EU limits. As a result of the bank recapitalisation, Fitch has downgraded Ireland’s sovereign debt to AA- (as well as the government guaranteed debt of the major financial institutions) and other ratings agencies have warned they may follow suit.

The job losses have not been particularly brutal

Let’s not forget that the Irish banking crisis has been simmering since late-2008 and – in the face of record losses that have since ensued – by this point most global financial services organisations would have been liberally swinging the axe.

Make no mistake, bankers within domestic institutions are demoralised – hiring and pay freezes enforced since 2008 have meant many people have simply been treading water. But, so far at least, job losses have been comparatively light.

At Anglo, the biggest casualty of the crisis, headcount has fallen by 393 since March 2009 or 22% of the 1,753 people employed at that time. Proportionately, this is the most brutal.

Staff numbers at AIB have fallen by 700 since June 2009, a tiny fraction of total headcount and the 750 redundancies announced by Bank of Ireland is a small proportion of overall employees.

The two largest banks are estimated to have let 3,300 staff depart since the crisis began and this – coupled with the 3,000 jobs lost at foreign-owned lenders – means the market has felt a significant degree of pain.

But the smart money suggests the majority of job losses are still to come – Anglo is soon to be a shadow of its former self, AIB is shrinking which could lead to thousands of job losses and Irish Nationwide’s future is still in doubt.

The (vague) positives

Most banks have been recruiting, but for obvious reasons this has largely been under the radar. Largely, banks have replaced business critical departures, and contractors been hired to support the thinned out (and overworked) ranks of permanent staff within most areas.

In particular, as the banks package up these toxic loans for transfer across the government’s National Asset Management Agency (Nama), specialist teams have been recruited to aid the process. Anglo Irish, for example, now employs 92 people in its Nama division.

The point to emphasise, though, is that although the scenario is far from rosy in Ireland’s banks, the country’s wider financial sector is not in tatters.

A new report by Vale Columbia Centre on Sustainable International Investment points to how, paradoxically, the current crisis has made Ireland more attractive to foreign direct investment.

This is reflected by the bullish sentiment around Dublin’s International Financial Services District job creation potential.

In particular, the funds industry is growing once again. After a 7% drop in staff numbers last year from the highs of 2008, direct employment in the funds sector has again risen above 9,000 so far this year, according to figures from the Investment Funds Industry Employment Survey.

Undoubtedly, Ireland’s banks still have a lot of fat to trim, and we can expect significant job cuts in the near future. But the country’s financial sector is diverse enough to ensure it’s definitely no Iceland.