Stuck with high permanent salaries, all sorts of banks are cutting contractor rates

Goldman is reducing its London salaries slightly, but it seems to be the only bank doing so - so far. On the other hand, all manner of banks are said to be cutting the amounts they pay contractors.

First among them is UBS, which is reportedly reducing its contractor rates by 10% as part of its plan to eliminate CHF2bn of costs by 2013.

RBS is also rumoured to be reducing some contractors' pay by up to 10%, in a move totally unrelated to the recent leak suggesting it has some contractors who earn 2k a day.

There are also unconfirmed reports of Deutsche and BAML cutting contractors' pay by a similar amount.

"This is just internal politics," says one IT recruiter. "Someone at these banks is trying to look clever by showing they can cut costs. In fact, it will have the opposite effect - contractors will leave and they'll have to pay more to get them back."