Thursday's Headlines: European bond traders face layoffs as trading dries up

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Many European bond traders may be fired by the end of the year, as the European debt crisis brings trading activity to a glacial slowdown, The New York Times reports.

The sector was once the main profit generator for large European banks, and bond traders have come to symbolize the boom and bust in the sector.

“Panic that the default of a euro zone economy might lead to a crackup of the monetary union has turned European bonds, once freely traded and viewed as risk-free, into semi-poisonous hot potatoes that in some cases trade only by appointment,” the newspaper writes.

European banks, already strapped for cash due to the crisis, are now weighing cuts in their “overstaffed bond divisions,” according to the New York Times. Cuts have already taken place at Credit Suisse, which recently let go its head of European government bond operations and eight employees – which translates into roughly 20 percent of the staff in the group. Meanwhile, BNP Paribas has begun warning traders that their jobs may no longer be there in the new year.

Other News:

MF Global’s Jon Corzine to testify he was stunned by losses, can’t locate missing funds. [DealBook]

Deutsche Bank bomb threat triggers security alerts in New York. [Bloomberg]

J.P. Morgan’s Dimon says current Wall Street woes are cyclical, not structural. [Wall Street Journal]

Standard & Poor’s says it may downgrade Societe General, Unicredit, Deutsche Bank. [Associated Press]

Canada’s Scotiabank, CIBC increase bonuses more than others on strong earnings. [Bloomberg]

Barclays to end retail loans in India, which could erase 200 local jobs. [Wall Street Journal]

As European banks shed Asia business, other global banks ready to swoop in. [Financial Times]

Kynikos’s James Chanos says some bankers should be prosecuted for “looting” companies during crisis. [Reuters]

Global investors believe China will suffer debt-driven banking crisis within five years, poll shows. [Bloomberg]

UK broker Numis expands debt division to capitalize on lending slowdown. [Financial Times]

Mitsubishi UFJ’s trust bank discussing distribution deal with AMP asset management. [Wall Street Journal]

Spain’s Banco Santander sells 7.8 percent stake in Chilean business, following Colombian divestments. [Dow Jones Newswires]

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