Sept. 13 (Bloomberg) - European banks may resort to more jobs cuts or zero bonuses as they struggle to maintain fixed compensation levels amid deteriorating financial markets.
The companies are facing shrinking revenue and higher costs after raising base salaries of investment bankers by as much as 100 percent. That decision, which followed regulations to curb bonuses in the wake of the credit crisis, is irreversible even if conditions worsen, lawyers and consultants said, leaving banks with fewer options in their bid to improve margins.
"The absolute last thing banks will want to do is cut current salaries unless they have an explicit contractual right to do so," said Jason Butwick, a London employment attorney at law firm Dechert LLP. "The legal, reputational, commercial and logistical risks of going down that route are huge."