Bank of America and Merrill Lynch are to begin a series of layoffs across their investment banking business in the next days, with staff in Asia already having exited and 30% of London staff among thousands expected to go. The cuts come as it emerged that last-minute bonus payments to Merrill staff were likely to have been higher on average than those to be paid by Bank of America.

A recruitment industry source with knowledge of the situation said over 40% of employees in the US are also expected to lose their jobs.