A huge stock market crash in the US has brought down the world’s largest financial institutions, with some losing millions of dollars and some going bust.
In the Irish market, the big losers are US financial institutions like Citigroup and Wells Fargo, which are struggling to make a profit after years of losses and high debt levels.
The Irish Financial Markets Association said the collapse of US stock markets in 2018 has made it more difficult for them to access financing to prop up their businesses.
The losses for the banks and financial firms have left the economy exposed to the global downturn, and have led to widespread warnings of a global financial crisis.
The US stock market has been down 30 per cent this year, and the eurozone has fallen by almost 30 per a month.
The crash is having an impact on the Irish economy, with many businesses losing thousands of jobs.
In a report published this week, the Irish Government said that many of these companies had already laid off hundreds of thousands of people, while others have closed shop.
It said some of the worst affected sectors are the banking sector, with banks in Ireland being the biggest losers.
“This is a massive loss to the Irish public.
This is not a one-off,” said Michael Doyle, the chief executive of the Irish Financial Services Association.”
We are losing more than $30 billion in annual business revenue to the US financial services sector alone, and that’s not including the hundreds of millions of jobs that are at stake.”
The financial sector is also facing a slump in its profits as investors and firms sell off their stocks.
Many of the largest companies in Ireland are based in the United States, with Citigroup, Wells Fargo and Barclays having more than 50,000 staff in Ireland, according to the government’s data.
Citigroup, which has about 2.5 million employees, has seen its share price fall by about 12 per cent since the market crash.
The bank has been losing money, and is now on the verge of bankruptcy, and it has not made any profits since the end of last year.
Wells Fargo is facing a €1bn loan repayment due to the collapse in US stocks.
It has also said that it is reducing its workforce by more than 3,000 jobs.
The banking sector is in the worst position, with Ireland’s three largest banks, RBS, Lloyds and UBS, having some 3,800 staff.
The government said that Ireland is facing losses of almost €40bn due to a surge in demand for insurance products and products that cover the losses in the stock market.
The collapse in the financial markets has left the Irish financial sector vulnerable to the risks that have been associated with the global financial market crash, it added.
The Financial Services Authority said in its report that the financial crisis has affected the financial sector in Ireland.
“The collapse of the financial market in the U.S. and Europe has had a profound impact on Irish businesses and their ability to access capital,” it said.
“Many of Ireland’s leading financial firms are facing losses as a result of the global recession, and are reducing their workforce in the wake of the market collapse.”
Ireland’s financial services industry was the biggest loser from the global crisis, the report said, and its business was “in dire need of significant restructuring”.
“The financial crisis in the world has put a significant strain on the business of the State,” it added, saying that Ireland has a “unique position” in the global economy and is a large, global economy.
It is not the first time the financial services boom has been hit by a global downturn.
The financial markets were in freefall in 2014 when the eurozone’s economy began to slow down and the US economy suffered from a recession.
The report said the financial crash in Ireland is also having an adverse impact on Ireland’s economy, adding that it has been one of the biggest financial markets in Europe since the 2008 financial crisis, but that its economic recovery has been hampered by the crash.
“With a growing economy and a strong financial sector, Ireland has benefited from a global economy in the post-crisis era,” the report noted.
“However, the economic recovery in Ireland has been hindered by the impact of the 2008 crash and the financial turmoil that followed.”