Like the Monty Python sketch in which wealthy Yorkshiremen compete over who suffered the grimmest childhood, investment banking chiefs are tripping over each other to reveal how much they suffered in the fallout from the subprime crisis.

The latest declaration comes from Deutsche Bank’s Josef Ackermann, who paved the way for others to come clean a month ago when he called on investment banks to write down leveraged loan and trading books. Deutsche Bank’s additional revelations of investment banking losses on Wednesday provided rather less detail than was offered by UBS earlier in the week but they served their purpose. After the rash of similar warnings from UBS, Credit Suisse and Citigroup, the moderate surge in Deutsche’s share price is understandable.

Coming clean, then, has proved to be the way to go. Should heads roll too? UBS, whose own chief executive, Marcel Rohner, has been in the job only since July, has taken fairly drastic action. The chief financial officer has left the bank and the head of the investment bank has been sidelined. At Deutsche, though, no one has been axed as a result of recent problems. UBS plans to shed 1,500 of its 22,300 investment banking jobs by the end of the year. Deutsche Bank plans merely to stop adding to its 16,600 investment banking staff. Perhaps Mr Rohner felt freer to wield the axe, given that he is new to his job, or perhaps the Swiss bank’s conservatism makes it less tolerant of perceived excesses.

In recent years, investment banks have put considerable effort into managing downturns. Failure to cut enough staff means revenues can fall faster than costs. Cutting too deep can mean market share losses when markets recover. The banks now need to decide whether the credit squeeze marked the start of a real slowdown, or was just a nasty scare

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