Banks and government will search in vain to cure the City's ills

The government is desperately hunting for the magic bullet to end the credit crisis, says Simon Nixon, Meanwhile, major job cuts are inevitable in the banking industry.

Bankers returning from their holidays won't stay relaxed for long. Top of their list of worries will be pay and jobs. Everybody knows big job cuts are coming. And nobody thinks for a second that banks will match the record and totally outrageous bonuses paid last year when the credit crunch was already in full swing. So how deep will the cuts go?

The dilemma for bank bosses is twofold. On the one hand, no one wants to cut too deep and then find themselves left behind when markets recover. On the other, banks are under huge pressure from shareholders and regulators to shore up earnings and conserve cash.

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Simon Nixon

Simon is the chief leader writer and columnist at The Times and previous to that, he was at The Wall Street Journal for 9 years as the chief European commentator. Simon also wrote for Reuters Breakingviews as the Executive Editor earlier in his career. Simon covers personal finance topics such as property, the economy and other areas for example stockmarkets and funds.