'2012 will not be 'business as usual''.
The banking industry is facing tremendous headwinds as 2012 approaches, and the environment is perhaps the most challenging / hostile for around 80 years - far worse than the financial crisis of 3 years ago - as increased regulation, rising capital requirements and a fragile economic outlook further takes its toll.
With over 230,000 jobs lost in 2011, experts like Rochdale Securities analyst Dick Bove expect significant additional jobs to go next year (Bove has predicted that every major US financial institution will lay-off staff, and that US banking job losses alone for 2012 will hit around 150,000).
In the meantime, banks stocks continue to come under pressure. Bank of America stock closed at $4.99 Monday (although is up in early New York trading Tuesday), falling below the $5 mark for the first time since March 2009.
Bloomberg quotes Thomas Brown, CEO of Second Curve Capital, who said: 'I am absolutely shocked that we see it at that price. I understand why. The management and board don't give you a lot of confidence, but that's more than reflected in the value of the company'.
And spare a thought for Warren Buffett. According to The Wall Street Journal, Buffett is currently around $1.5bn underwater on the $5bn investment he made in the firm a few months back.
Finally, a warning for the UK government, which has signalled that bailed-out Royal Bank of Scotland's (RBS) investment banking business will be significantly cut back. The Financial Times quotes one unnamed 'senior RBS investment banker', who said: 'The government never wanted this business. They never understood this business. What they're going to realise is that, without global banking & markets, RBS as a 'utility bank' isn't a very good business'.