Incredible Shrinking Bankers at Davos Humbler Amid Austerity

Leaders of the world’s biggest banks touted the virtues of austerity at the World Economic Forum in Davos -- for themselves, not just for over-indebted governments. Many arrived in the Swiss Alps following a year marked by weak revenue, declining stock prices and cuts in jobs and compensation. The finance and banking industries remain the “least trusted” for the second consecutive year, according to a 20-country survey released earlier this week by public relations firm Edelman. “Last year every bank thought they could grow their way out of trouble,” Huw van Steenis, who oversees European bank research for Morgan Stanley (MS) in London, said between meetings with investors and policy makers in Davos. “Now they realize they have to shrink their way out of trouble.” Financial companies, mainly in Western Europe and the U.S., have announced more than 238,000 job cuts since last year’s meeting in Davos, according to data compiled by Bloomberg. Bank of America Corp. (BAC), Deutsche Bank AG (DBK), and HSBC Holdings Plc (HSBA) are among banks selling businesses and slimming down as they adapt to capital requirements approved by the Basel Committee on Banking Supervision, new national regulations and a slowdown in economic growth in Europe. By Christine Harper