Newspaper article The Evening Standard (London, England)

One in Three at Debt-Crisis Banks Faces Axe

Newspaper article The Evening Standard (London, England)

One in Three at Debt-Crisis Banks Faces Axe

Article excerpt

Byline: NICK GOODWAY

ONE in three investment bankers involved in creating and sellingsecurities backed by mortgages or other pools of debt could lose their jobs asa result of the subprime mortgage crisis, a leading New York consultancy haswarned.

Options Group, which tracks pay and hiring trends in the financial servicesindustry, said that those who survive the cull face the prospect of much lowerbonuses, or none at all, this year.

The warning came as another group of banks saw the departure of specialistexecutives as it was rocked by rising default levels in the US mortgage market.

The defaults have had a severe knock-on effect across the whole of the debtmarket as credit terms are squeezed and borrowing costs soar. Analysts havewarned that up to 5000 jobs could be cut in the City and Canary Wharf as aresult of the credit crunch.

Royal Bank of Scotland's head of derivatives trading in the US, Rick Caplan,co-head of collateralised debt obligations (CDOs) at RBS Greenwich Capital, hasleft along with six other colleagues. …

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