U.K. banks aren’t nearly as good at firing people as are their U.S. rivals. British banks are slashing jobs left and right, but, unlike competitors from across the pond, U.K. firms aren’t becoming more efficient. They’re just becoming smaller.
The U.K.’s four largest banks – Royal Bank of Scotland, HSBC, Lloyd’s and Barclays – have cut nearly 190,000 jobs since 2008, dragging employment in the sector to a nine-year low, according to Bloomberg. The number of jobs lost is eye-opening, but far from shocking.
What’s truly disturbing is that the firms’ costs as a proportion of revenue actually increased over the period. Total revenue is down 13% since 2008, with only a 1% drop in costs. It’s worth repeating: 190,000 job cuts contributed to a 1% reduction in costs. Wow.
U.S. banks, in contrast, have been able to shrink their compensation ratios without doing nearly the same damage to their balance sheets. Simon Maughan, an analyst at Olivetree Securities, told Bloomberg that additional mass layoffs will likely be avoided, but cuts will continue to trickle in if U.K. banks can’t follow in the footsteps of U.S. firms by doing more with less.
The founders of digital currency company Liberty Reserve have been charged with running a $6 billion money-laundering operation. Liberty morphed into the “bank of choice for the criminal underworld,” according to federal prosecutors.
With additional headcount reductions rumored, Royal Bank of Scotland has seen some of its most talented U.S. bankers walk to rival firms. Morgan Stanley, Bank of America, Citigroup and Jefferies have all poached RBS staffers in recent months.
The Securities and Exchange Commission, having spent the last four years concentrating its efforts on fighting wrongdoings on Wall Street in the wake of the financial crisis, plans to shift resources back to Main Street. Accounting fraud may soon become the next insider trading.
J.P. Morgan Chief Executive Financial Marianne Lake is a single mother with an 18-month-old child. How does she do it? “I try to spend anywhere from 15 to 60 minutes with my son. Failing that, I try for 30 to 60 minutes together at the end of the day.”
U.S. banks have begun outsourcing monotonous mortgage processing jobs to Indian IT firms rather than adding to their own staff.
The shrinking financial services sector is making it difficult for developers to lease real estate space at the World Trade Center.
Moody’s Investors Service has upgraded the U.S. banking system’s rating to “stable.” That sure sounds better than “negative.”
Buzz Around the Office
Toronto’s embattled mayor Rob Ford was surprised by a group of citizens who assembled to wish him a happy 44th birthday. They delivered a cake with the words “Please Resign” written in frosting.
List of the Day: Cover Letter Flops
Here are the three most common cover letter mistakes.
- You use a generic salutation.
- You talk about yourself, rather than the value you can provide.
- You wrote a novel.