BBC News
watch One-Minute World News
Last Updated: Friday, 25 January 2008, 11:53 GMT
Credit Suisse makes 500 job cuts
Credit Suisse logo above its Geneva office
The crisis in global lending markets has hit banks worldwide
Credit Suisse Group will trim 500 jobs from its investment banking arm, after the global lending crisis slowed demand for some of the services on offer.

The Swiss bank said the cuts would be made "primarily" in the unit involved with selling and trading bonds.

Earnings in this area have been hit, as the market for trading debt secured by sub-prime US home loans has dried up.

About 25,000 jobs have been cut in financial firms worldwide as a result, according to the Bloomberg news agency.

A Credit Suisse spokesman said the job reductions were as a result of "market conditions and projected staffing levels required to meet client needs".

But added that "several hundred people" would be hired this year "in areas targeted for revenue growth".

These include emerging markets, commodities and derivatives.

Shake-up

For many years, banks worldwide made huge bets on the strength of the US housing market, as low interest rates enabled people on low incomes to get access to cheap mortgages.

But the steep rise in US interest rates until last summer hit these mortgage holders hard, triggering record defaults and, in turn, causing investments linked to this sector to lose billions of dollars in value.

Profits at Credit Suisse's investment banking division were nearly wiped out as a result, with returns falling from $653m to $5.1m.

It has been forced to write down the value of investments related to residential and commercial mortgages and connected leveraged loans by nearly $1.9bn.

But this is a modest amount compared with some of its rivals in Europe and on Wall Street.

Merrill Lynch and Citigroup both lost their chief executives as a result of the damage caused to their balance sheets. Restructuring efforts are also under way at other banks to shore up capital and curb risky strategies.

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific