Over the last two years the economy has been in a very shaky situation and many people have suffered. During this time companies have failed, people have lost their jobs, debts have been defaulted on and real estate properties have gone into foreclosure. All of these events have made things very difficult for many people and many people are suffering as a result. Many industries have been hit hard by the current recession including construction, real estate and most of all the banking industry.

The economic crisis didn’t happen overnight but rather over a span of about five years. As far back as 2003 the real estate and mortgage industries were exploding. Just about everyone was buying a house and other forms of real estate. In the banking industry, the professionals in this field saw a huge demand and therefore a great opportunity to be very profitable. During this time many bankers decided to give out loans to people to buy real estate and therefore would give out loans almost indiscriminately. Since banks want to give out as many loans as possible to be profitable they offered very lenient criteria to underwrite loans. They also would give out loans with very good terms and this further enticed people to seek out more loans. Things looked very good and for a while everyone was happy.

However the real estate bubble would eventually burst as the demand for housing went in decline and loans were no longer sought after as they were in the past. Unfortunately for many people buying real estate they got loans that were very reasonable in the first few years but starting in the third and fourth years, the loans became too high and unaffordable. This resulted in many loan defaults and foreclosures and thus money lost for the banks. Since the banks were losing billions of dollars they had little to no money to operate and so they needed to cut staff by a considerable amount. The banks were low on cash and therefore many people had to be forced out of work because of the massive financial losses. Along with the banks cutting staff they also were unable to provide more loans to people and so this led to more difficulty in the banks earning money and staying in operation. The massive financial losses and inability to make more money led to the banks cutting staff along with the decrease in demand for loans.

Like all recessions there is an end and a revival of the economic conditions. Since recessions are part of the business cycle, there is eventually a point where the economy recovers and gets back into a healthy state. Eventually people begin to spend more money therefore businesses make more money and then hire more workers. The banking industry is no different. Part of the revival of the banking jobs has been the government bailouts provided in late 2008 and early 2009. These bailouts helped keep the banks afloat and therefore prevented even more job losses and financial problems. As a result banks had money to use and therefore were able to retain some of their best debtors. Along with keeping their best customers they were able to retain some of their staff. Since the economy was starting to get better, companies were earning more money and therefore more able to afford credit to stay in operation. This has led to the banks earning more money and able to hire more staff.

In conclusion the banking jobs were lost due to a real estate and mortgage bubble bursting and the economic recovery has now added more banking jobs. When the banks gave out bad loans that were eventually unaffordable for people, they lost lots of money and therefore had to lay off staff. However with the government bailouts and the natural economic recovery more money is being made and therefore banks across the globe are able to hire more staff. The natural economic recovery cycle, renewed consumer confidence and the government bailouts have all contributed to banking jobs being added throughout the world.