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