Banks typically cut back staff in lean years and increase hiring when times improve. But this round of cuts – UBS recently announced 10,000 jobs are going, while Citi announced 11,000 jobs will be cut and Barclays is expected to announce 2,000 roles will be lost – is likely to be more permanent.
“Tougher regulatory requirements for capital and leverage are set to lower the industry's return on equity potential, causing banks to reassess the scale of their capital markets activities,” said the agency’s report.
And although a wave of job losses has been announced, it warned worse is on the way.
“Once the industry has greater certainty about future regulations, we believe it will likely proceed with deeper restructuring measures.”