Recruitment could suffer as predictions of collapse gather pace

The financial sector is bracing itself for another major collapse of a financial firm, it has been reported.

The financial sector is bracing itself for another major collapse of a financial firm, it has been reported.

A survey of US and European investors found that almost six in ten believed there would be another financial institution that runs into serious trouble within the next six months.

Furthermore, another 15 per cent of respondents confirmed that they believe a collapse would occur in the next 12 months.

Explaining the weight behind so many investors' beliefs, Frank Feenstra, consultant at Greenwich Associates, said: "Most institutions think we are currently in the most dangerous period for globalfinancial services firms."

However, the next six months could affect change in itself: "Perhaps if the markets can make it through the next six months, the level of pessimism may begin to subside," he added.

The survey also found that 55 per cent of investors had already stopped using at least one institution, for fear of insolvency at a later date.

With the next six months crucial however to the overall performance of the market, there is an equally strong chance that confidence will return to the sector due to a lack of any institution failing.