Tags: banks | layoffs | emloyment | economy

Bove: Bank Layoffs to Hit 150,000 in 2012

Friday, 16 Dec 2011 02:10 PM

Bank layoffs announced in 2011, including the 1,600 announced by Morgan Stanley set to take place in the coming months, are far from over and will likely break 150,000 in total number next year, says noted banking analyst Dick Bove of Rochdale Securities.
Some 230,000 layoffs in the banking sector were expected this year, but increasing regulations and sluggish banking activity have forced financial institutions to slash payrolls.
Occupy Wall Street protestors shouldn't claim victory.
"What no one has figured out as yet is that the big government cannon is harming more than the big banks, evil though they may be," Bove says in a note to clients, according to CNBC.
"Small banks are hurt far more than the large ones due to the various restrictions on rate and balance sheet size plus government price fixing."
The overall economy, Bove adds, will suffer.
"It has not been understood that people who are fired cannot buy products. They cannot pay taxes. They receive government benefits like unemployment checks instead," Bove says.
Morgan Stanley's cuts come at a time when the bank reduces anything from smart phone usage to travel and data services in order to save money, as investors worry over the bank's exposure to the European financial crisis.
"Although everyone gets hit on bad days with Europe, Morgan Stanley was the poster child, with the most extreme swings," says Walter Todd, a portfolio manager at Greenwood Capital who liquidated most of his Morgan Stanley shares last week, according to Reuters.

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