Financial Industry in a Depression of its Own RBS Firing 45% of pre crisis Global Banking and Markets Headcount

The Financial Industry will shed another 150,000 jobs according to  Richard Bove, an analyst at Rochdale Securities LLC . Royal Bank of Scotland the bankrupt UK bank that was taken over the British government is going to kill a number of investment banking divisions and will fire 3500 people. RBS has already fired thousand before in wholesale and corporate banking . Now RBS will completely exit from a number of divisions like M&A, Cash Equities etc. which will mean thousands of firings . In an environment when financial jobs are scarce , this means that the fired thousands will have a tough time getting into the workforce again.RBS is going to fire 3500 people in addition to 2000 already announced. This would bring down the 24,000 pre crisis headcount by almost 45% .

The Financial Industry is in  Depression with the sector shrinking continuously as its bloated structure deflates .Can’t say its a bad thing as excess financial sector growth was partly responsible for the 2008 crisis which continues till this day globally. he Financial Industry has become too huge as a percentage of the global economy with any value creation to say something like the IT industry. The share of  the market cap of the stock market had become too high during the boom boom years of 2008 and it is continuing to go down.Despite the best (some would say the worst) effort of the governments to prop up the Too Big to Fail Banks,jobs are being let go as there is not enough work. European Banks are shrinking their balance sheets as they are too leveraged and insolvent. Without the ECB crutch,almost all of them would go under.

Taxpayer-backed Royal Bank of Scotland announced on Thursday it would cut 3,500 jobs in a reorganization and rebranding of its investment banking arm as the lender reins in its ambitions to be a global financial player.

The cuts, which are to be phased in over three years, will largely affect employees in Global Banking and Markets, which had offered advice on mergers and acquisitions. The division has 18,900 employees overall. “Our goal from these changes is to be more focused for customers, more conservatively funded, more efficient and with better, more stable returns for shareholders overall,” Chief Executive Stephen Hester said in a statement.