Effect of government majority bank stake on jobs??

[inver]

With the government likely to take majority holdings in the two main banks and speculation that AIB executives may leave as a result, would this make cost-cutting and job cuts more, or less likely at the two main banks?

 

[Mpsox]

It's very difficult to say. If you look at what happened in the UK, when RBS got more or less taken over in 2009, they've let go over 10000 staff (including 20% of the workforce in Ulster Bank). Against that, the more staff that get laid off, the more the Govt has to pay out in social welfare payments.

From what I've seen in RBS (and I have good contacts there and am on their sites for business a couple of times a month), they have become far more risk adverse and cautious in what they do, hence areas such as lending have been scaled back and risk and governance beefed up, soft areas such as sponsership and certain staff benefits (eg reward schemes) have also been cut back. They've also pushed their suppliers for significant cost savings

 

[Potatoeman]

It's very difficult to say. If you look at what happened in the UK, when RBS got more or less taken over in 2009, they've let go over 10000 staff (including 20% of the workforce in Ulster Bank). Against that, the more staff that get laid off, the more the Govt has to pay out in social welfare payments.

I find this argument very strange as it doesn’t make much financial sense. It’s a lot more expensive to employ 10000 people than pay social welfare benefits for them.

 

[german]

The newspapers today speculated that 1.5% will be added to mortgages this year to pay for bank recapitalisation. Tough year ahead

 

[paydebbie]

Catch 20-22 I imagine as the most the major banks have given fairly hefty loans to their own employees who will end up defaulting if they are laid off. The banks are culling as we speak, I have tried to contact a few different contacts I had in the past in relation to private banking matters and they have all moved on. The manager I used to deal with is retiring in 1 months time so I think they are culling continually to make sure their balance sheets look a little bit less catastrophic.

 

[csirl]

With the government likely to take majority holdings in the two main banks and speculation that AIB executives may leave as a result, would this make cost-cutting and job cuts more, or less likely at the two main banks?

I think this is hillarious. Failed bankers threatening to leave if the Government does X,Y,Z etc.

They are calling the Governments bluff. Where are they going to go? Most are unemployable and there arent exactly many banking jobs out there anyway. I say let them go.