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Barron’s (January 29)

2018/ 01/ 31 by jd in Global News

“Interest rates and volatility have been so low for so long that what was once abnormal is starting to look normal,” leading investment banks to adopt different approaches. Goldman has maintained its trading unit, “which lives or dies on volatility and which sealed Goldman’s reputation as the elite firm on Wall Street,” even though its revenue “has been reduced to crumbs.” In contrast, Morgan Stanley slashed the head count at its trading unit and has seen its market value surpass Goldman’s. But this could prove short-lived. “When trading conditions improve,” revenue from fixed income currency and commodities (FICC) “could bounce back quickly. No one else is as poised as Goldman to profit.”

 

Institutional Investor (February Issue)

2015/ 02/ 25 by jd in Global News

“Over the past five years, as Barclays and Royal Bank of Scotland in the U.K., UBS and Credit Suisse in Switzerland and even Deutsche Bank have pared back their investment banking activities, U.S. banks have powered ahead in the European arena in just about every sector, including the all-important FICC and M&A advisory categories.”

 

Institutional Investor (June 8)

2012/ 06/ 13 by jd in Global News

Jamie Dimon “may well have signaled the end of an era for big global banks.” The JP Morgan Chase CEO admitted his bank had lost at least $2 billion in derivatives trades. “For three decades the fixed income, commodities and currencies business has been the cash cow of investment banks.” Demand for FICC, as this cash cow is commonly known, products has been slumping and banks have been struggling to comply with stricter capital requirements. “And now, thanks to JPMorgan’s losses, heightened demands for restrictions on virtually any proprietary trading or risky hedging, will impact the FICC business at most banks, hurting their profits and forcing them to rethink their strategies. Some business lines are likely to be closed or sold off.”

Jamie Dimon “may well have signaled the end of an era for big global banks.” The JP Morgan Chase CEO admitted his bank had lost at least $2 billion in derivatives trades. “For three decades the fixed income, commodities and currencies business has been the cash cow of investment banks.” Demand for FICC, as this cash cow is commonly known, products has been slumping and banks have been struggling to comply with stricter capital requirements. “And now, thanks to JPMorgan’s losses, heightened demands for restrictions on virtually any proprietary trading or risky hedging, will impact the FICC business at most banks, hurting their profits and forcing them to rethink their strategies. Some business lines are likely to be closed or sold off.”

 

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