The financial world has begun counting the cost of the human fallout in the wake of the banking collapse and global economic woes. As Goldman Sachs embark on the 10 per cent reduction in its 32,500-strong global workforce, the continued shrinking of the banking industry will deepen the economic plight of financial centres such as New York, London and Hong Kong by reducing tax revenues and putting pressure on the local housing market.

Experts say the worldwide redundancies in the sector could top 70,000 among US groups alone and add to the estimated 150,000 jobs already lost. According to research by UK-based International Financial Services, the number of vacancies in London has fallen well below the number of those seeking work for the first time in three years. And with the recession beginning to grip, most observers expect further job losses as the industry's revenues continue to fall, with the US leading the way as many of its domiciled banks announcing additional lay-offs on top of the estimated 23,000 jobs lost after the disappearance of Bear Stearns and Lehman Brothers.