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JPMorgan thinks property prices will largely determine whether the main impact from the probe is felt through banks and financial stability, or via the more likely outcome of a consumption hit.

PHOTO: AFP

Sydney

AUSTRALIA’S banking probe could see job cuts in the finance and real estate sectors equivalent to losses during the 2008 global financial crisis, according to JPMorgan Chase & Co.

JPMorgan analysts led by Sally Auld see three main channels for the Royal Commission to exert influence on the Australian economy: tighter lending standards and slower credit growth; wealth effects through housing; and industry restructuring.

“The finance and real estate sectors now represent 12 per cent of gross domestic product,” said Ms Auld, head of fixed income and currency strategy for Australia at JPMorgan, noting that both have been growing above their long-term trend.

“So some consolidation seems likely. We think employment in these industries could…