Editor's take: Bankers' misfortune means misery for everyone

One of the most enduring images of the financial crisis is that of Sir Fred Goodwin chuckling on his Blackberry having secured a 640k pension after leading RBS to the brink of ruin. It's one that's come to represent justification for public outrage against 'fat cat' bankers. Now, however, with swathes of Scottish financial services workers earning substantially less losing their jobs, the impact is being felt elsewhere north of the border.

With the Scottish banking system in tatters, RBS and Lloyds/HBOS have begun shedding Scottish staff in ever larger volumes. Other firms have joined in, with both Aegon and Standard Life announcing cuts recently.

It's easy to view this as greedy bankers getting their comeuppance, but the people laid off are far from fat cats. RBS's plans to make redundancies within its group manufacturing division, for instance, will affect people earning an average of 26.6k.

There's more to come, with Ernst & Young's Scottish Item Club predicting 10,000 financial services job losses by 2010. Scary figures indeed for an industry that employs around 80,000 people in Scotland, but the knock-on affect should not be underestimated.

The 'business services' sector, which can encompass everything from accountants and law firms to office cleaners, is particularly badly affected by the financial services meltdown.

E&Y says that 5,200 jobs were lost here in the second half of 2008, with an estimated 60,000 to go before the end of this year.

The latest example is Dundas & Wilson, one of Scotland's oldest law firms, which was particularly badly affected by the collapse of HBOS and RBS. Having cut 43 staff earlier this year, it's now asking the remaining 650 to take a 10% pay cut and 18 days unpaid leave.

Then there's the property market. With bonuses eradicated and the threat of redundancy ever-present, Edinburgh's bankers are unlikely to move, which is driving prices down.

The Edinburgh Solicitors' Property Centre, which handles around 90% of housing sales in the city, told the FT recently: "Not every banker lives in a six-bedroom mansion. It's the guys in middle management, who want the aspirational three- and four-bedroom houses with the double garages and gardens... It doesn't help, I suppose, having the two most infamous banks in Europe headquartered in your city."

With a 2.9% contraction in the Scottish economy predicted for next year, it's unlikely anyone's going to shed a tear for redundant bankers. But you certainly shouldn't relish their misfortune.