Bankers Threaten Fed with Layoffs if it Doesn’t Raise Rates

[marmar]

Bankers Threaten Fed with Layoffs if it Doesn’t Raise Rates
by Wolf Richter • September 17, 2015


“Let me assure you, if the revenue environment weakens or interest-rate structures don’t move up and the economy slows down, we’ll have to take out more costs,” Bank of America CEO Brian Moynihan said on Thursday at the Barclays Global Financial Services Conference. And that would mean more job cuts.

BofA is famous for whittling down its headcount in recent years. In Moynihan’s 25-slide presentation, there was this chart that shows just how skillfully he has trimmed down his workforce, chopping it by 25% overall since the second quarter of 2011:



So if, as he said, “interest-rate structures don’t move up,” there would be more of the same. These interest-rate structures are the result of the Fed’s zero-interest-rate policy. The purpose of this policy suddenly isn’t the wealth effect any longer – Bernanke’s stated purpose – but ironically, as Chair Yellen claimed today somewhat defensively, to “put people back to work.”

Not get them axed from banking jobs.

Banks try to make money in a myriad newfangled ways. But the classic way is on the spread between the interest they pay on deposits and the interest they charge on loans. A wide spread fattens their profits. But these spreads have become paper-thin. ...................(more)

http://wolfstreet.com/2015/09/17/bankers-threaten-fed-with-layoffs-if-it-doesnt-raise-rates/

[Erich Bloodaxe BSN]

1. I think most people who aren't bankers

would think fewer bankers is a good thing.

Just remember when you're trying to make more money, you get a lot more by axing the highest paid workers rather than the lowest. Chop one CEO and you save as much money as chopping thousands of front line workers.

[abelenkpe]

5. Highest paid never get cut first

Or offshored.

[Demeter]

2. Threatening the Fed like that is not a good idea

The banksters should be threatening Congress!

Janet won't raise rates until she's sure the Tea Party won't shut down the government. She can't take the risk of throwing the entire world into a Greater Depression by arrogantly raising interest rates in the face of so many good reasons not to.

[DemReadingDU]

3. Don't forget pensions, 401k, IRAs

Some of these products contain safe low-risk investments that have been earning 0 interest for years. How can these be maintained without generating income for current and future retirees?

[Fred Sanders]

4. Would Sanders nationalize the banks, because that I would favour?

[Historic NY]

6. Who needs tellers.....

Chase appears to be losing front end people my local bank is down to 3 tellers and then send in temporary desk people to work. The past year the head teller has been working the service desk several times a week. At one of the other branch they have installed 3 teller ATMs like are being installed in NY City. They have one of the lowest interest rates in the state so apparently they aren't hurting just retrenching with soaring profits.

http://articles.chicagotribune.com/2012-11-23/business/ct-biz-1123-atm-update--20121123_1_new-atms-chase-atms-bank-branches

[Punx]

7. Rule of Thumb at Banks

The less you get paid, the closer you are to the actual $ and the customer. Being a teller nowadays is much different from the 70's or 80's. The sales pressure is huge and you are often expected to be doing several things at once.

FYI I was in banking for seven years. Three years in retail.