This is probably the biggest reality check yet.
Bloomberg reports that Europe’s failure to resolve its sovereign-debt crisis will force investment-banking chiefs in the region to consider shuttering entire businesses rather than rely on piecemeal job reductions to revive profit.
Dealmaking fees may drop 25% this year from 2009, when the crisis began in Greece, research firm Freeman & Co. estimates. European banks have cut about 172,000 positions since then, according to data compiled by Bloomberg, the same strategy they used after Lehman Brothers Holdings Inc. collapsed in 2008.
Hit the link below to access the complete Bloomberg article:
But here's 4 quotes from the article to give you the favour:
'We’re at an inflection point. Some banks need to come out and say we need 30 percent to 50 percent fewer people. The hit has to be more severe than 1,000 people here and there. Second- or third-tier players have to get out of certain businesses and focus on niches - either products or geographies'.
Steve Hussey, a London-based financial-institutions analyst at AllianceBernstein
'The European crisis has developed closer toward our more grim scenario than our better-case scenario over the course of the past two years. Our prospects and our future view on profitability is different today than it was in 2010'.
Deutsche Bank co-CEO Anshu Jain said last month
'If you remember back in November of last year, I don’t think that even a pessimistic outlook for the next 12 months would tell you what we are living in right now. The environment has completely changed. We have been very proactive in accelerating taking down cost as we saw the new environment developing, and we will not be shy to continue to do so as we see the market changing, as I do believe that many of our competitors will have to do'.
UBS CEO Sergio Ermotti said last month
'As investment banks strip their businesses in the face of a poor economy, poor revenue and higher regulatory capital, it’s the survival of the very, very fittest. We could see just three to five global investment banks'.
Kevin Burrowes, U.K. Head of Financial Services at PricewaterhouseCoopers LLP