It’s not fun to be working at Credit Suisse, RBS, Deutsche Bank and UBS right now.Euro banks are getting slammed with a number of questions about their stability.
First, people are shorting them so much that some countries (France, Greece, South Korea, Turkey) banned short-selling in the short-term. Of course that only made people more sceptical of Euro banks’ solvency given their exposure to the Euro Sovereign debt crisis and the counter-productive nature of a short-selling ban in 2008.
Then there’s Germany’s and France’s Merkel and Sarkozy recent proposal for a transaction tax on all financial transactions in the European Union. That would obviously hurt banks, particularly in their high frequency trading units. So they’ve already started lobbying against the tax. What’s worse is that some countries support the proposal (the good news is that England won’t).
And of course they’re also dealing with upcoming capital requirement deadlines while all of this is going.
And watching their friends get laid off.
But now, here’s how you know it’s 2008 bad. There’s the kind of extreme cost cutting that’s affecting the fun stuff: travel and cookies.
A bank consultant gave Reuters a few examples of “trivial” cost cutting at banks:
- The Christmas Party
- No travel for a week each month
- Junior bankers have to travel in Economy
- Some people have to take budget airlines like EasyJet
- Canceled newspaper subscriptions
- Restricted laundry bills on business trips
- Budgets tightened for marketing, advertising and training
- Restrictions on colour photocopying
- Restrictions on “biscuits” (European for cookies)
The silver lining is that the more costs are cut, the fewer jobs have to be.