In the dark days of the 2008-2009 financial crisis, the first thing banks did was institute widespread hiring freezes across the board.
The second thing they did was mass layoffs.
While this crisis has no precedent, that isn’t expected to be the case this time around.
The banking system continues to hold up thanks to the Federal Reserve’s and other central banks’ unprecedented, ‘whatever it takes’ approach to keeping the financial system greased, the inevitable plunge in economic activity is already spurring banks like JPMorgan (JPM) - Get Report to take drastic action to cut costs.
Citing people familiar with the matter, Bloomberg reported on Tuesday that JPMorgan has asked its corporate and investment banking, consumer and asset- and wealth-management groups to review job postings and pull listings for roles that aren’t immediately needed.
The hiring restrictions come as JPMorgan and other financial institutions face a confluence of pandemic-caused conflicting events: a global economic shutdown that has made financial markets more volatile than at any time in history, damaged portfolios and returns, extreme economic uncertainty and strained internal resources.
Some JPMorgan operations such as home lending, where business has ramped up due to low interest rates, are excluded from the freeze, according to Bloomberg.
Meantime, Bank of America (BAC) - Get Report took a different tack with respect to its market traders on Tuesday, giving them permission to execute orders from home, according to a memo sent to staff in its global markets division.
The memo replaces guidance that had barred traders from taking, executing or amending orders at home without prior management approval, according to the documents seen by the Financial Times.
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