So Deutsche staff will have to share the pain – it’s high time bankers did

“Shocking” was the adjective commonly used for the horror show of Deutsche Bank’s latest trading update, although that was partly because its announcement that it could report third-quarter losses of more than €6bn (£4.4bn) came out late and the amount of red ink caught analysts on the hop.

The shares started bleeding in New York, as traders gave their early reaction. But the blood flow was quickly staunched after Europe opened and they started to rally.

The real gloom was hanging over staff, especially those in London, who were left facing up to 8,000 job cuts.

In part, the markets’ response can be taken as a recognition that most of the nasties are now on the table and nearly all of the loss will be made up of non-cash items – write-downs to the value of various businesses in Deutsche’s portfolio.

There was also a nasty provision for litigation losses – but that shouldn’t surprise anyone as the stains from precious metal price fixing become more obvious and the lawyers get to work now the regulators have finished with Libor and forex fixing.

Shareholders may still have to say auf wiedersehen to a dividend. But, in what could be seen as a vote of confidence in Mr Cryan, there are hopes that the measures he has promised may mean a widely expected cash call could be avoided.

If that is the case, the pain will have to spread beyond those losing their jobs to those still on the employee register. In a letter to staff, Mr Cryan said the write-downs and dividend cut/removal will have to be “factored in some way into our upcoming decisions on variable compensation for the year”.

In other words: you’re getting your bonuses cut. Mr Cryan said shareholders would “rightly” expect Deutsche’s bankers to take some of pain on their shoulders, and so they should. He also promised to achieve “a fair balance” between the two. Which is open to interpretation.

For too many years that balance has been entirely wrong. The financial masters of the universe at all the big banks have expected to be paid handsomely throughout the bad times – while the people who put their money at risk and suffered loss as a result of their activities have been told to take it on the chin because superstars need “motivating” to stay put and do their jobs.

Institutional investors are finally starting to recognise that this is no longer tenable. And they are feeding that message through to the likes of Mr Cryan. I suppose it’s better late than never.