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The Crisis affecting the Banking sector causes acute Social problems

Deutsche Bank (CC BY 2.0) by plassen

Banks across the world have already announced more than 48,500 job cuts this year (Re.Bloomberg). The layoffs represent about 6% of their total workforce which is significant. In fact, European banks are being hit the hardest. Deutsche Bank is at the top of the list and could cut up to 20,000 jobs (Re.BBC). And Swiss banks are not spared by this global difficult situation. Automation, AI and negative interest rates are the main reasons to explain why this sector is shrinking. The European financial sector accounted for 2.7 million jobs in 2018 compared to more than 3.2 million jobs in 2008 (Re.ECB). The challenges facing European banks are increasing apace. Obviously, the negative interest rates which seem to be the new norm have a relevant impact on their revenues and margins. And given the tough economic times, a large majority of experts still agree that the European Central Bank will not change its monetary policy any time soon. We should also stress that many banks urgently need to cope with rapid technological change. In conclusion, staff levels will continue to be cut and this trend could even accelerate in the coming years. Indeed, as is often the case, job cutbacks are at the core of many strong cost reduction programs. The banking sector will undoubtedly remain under pressure in the future. It will have to substantially improve its competitiveness in order to survive in harsh conditions.

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