No Pay Jose!

The Grim Reaper

There was much mirth in the City last week, on the news that the UK Treasury had strong-armed executives at Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered to adopt curbs on bonuses payments.

Staff at non-British European and US firms, however, thought that they would still be laughing all the way to the bank. But that doesn't appear to be the case as, according to The Times, City Minister Lord Myners has confirmed that the Treasury 'will speak to the major investment banks with significant operations in the UK and urge them to endorse and act in accord with the (compensation) decisions made at the G-20'.

The Treasury is thought to be looking to hold discussions with executives at Bank of America Merrill Lynch, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and UBS. French banks have, of course, already signed up to the accord.

And all of a sudden the news on the global economic front has turned a little bearish, and global stock markets are off their recent highs.

New York University Professor Nouriel Roubini, the man who predicted the financial crisis, has told Bloomberg that 'markets have gone up too much, too soon, too fast'. He said: 'I see the risk of a correction, especially when the markets now realise that the recovery is not rapid and V-shaped, but more like U-shaped'.

But some are said to be even more bearish than Roubini. The Financial Times says that HSBC CEO Michael Geoghegan 'is so convinced that there will be a second downturn in the coming months, that he plans to delay any rush to expand the bank'. Geoghegan told the newspaper that, in his view, any recovery is likely to be W-shaped.

Finally, The Guardian reports that, according to a recent CBI / PricewaterhouseCoopers report, up to 60,000 jobs in the British financial services sector are likely to be lost this year. And there is a school of thought that another round of global investment banking job cuts is likely early next year in the event that the recovery stalls.

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