Now that green shoots are sprouting like alfalfa and various institutions are hiring, it’s time to ask the inevitable? Were too many people let go?

In some cases, the unavoidable answer appears to be that they were. Most notably, convertibles desks are seeing a sudden reversal in their fortunes: 80% of staff were reportedly slashed in late 2007/early 2008; now that issuance is up, banks are hiring again.

But convertibles aren’t the only area where banks appear to be making amends for recent headcount reductions.

Last week it emerged that Bank of America Merrill Lynch is rehiring Julian Trott, its former European head of fixed income syndicate for emerging markets into a similar role as head of central and eastern Europe, Middle East and Africa DCM. UBS is rumoured to have hired in structured finance after its few remaining team members threatened to leave due to a lack of critical mass, and JPMorgan is said to have rehired a senior DCM coverage banker.

Having cut 25% of its investment bankers between the end of 2007 and the start of 2009, UBS in particular seems ill-placed to benefit from any upturn.

However, there are people who take strong exception to the notion that banks are now regretting their recent cost cutting. “It all depends whether you think this is a recovery,” says Simon Maughan, an analyst at MF Global. “It’s no good saying capital market billings are up this quarter and everything’s fine. It’s only when government spending is scaled down that the pain will really be taken.”