How does the US/North Korea tension affect S&T in the major IB's?

How will the banks benefit from this? to my understanding, clients will want to trade (sell off risky assets + move towards safer investments) - which will help raise commissions through more trade volume?

 
Best Response

Not quite sure there would be more trade volume in times of war, as the average american is usually pretty risk averse. A war would really disrupt the electronics market globally, prices would rise in response to lost sales.... South Korea accounts for 6% of electronics produced in the World, and with Asia being a large shipping port tangent(have 9/10 busiest supply ports in the world), supply lines and respective supply chains would experience a nasty bullwhip effect. Banks may potentially raise lending rates in an effort to stimulate activity.

Debt would obviously increase for all parties involved. There are also significant global gdp considerations that may linger far after the potential war/tension vanishes.

 

They won't really unless anything actual material happens. I think there was a minor jump in volatility, but nothing substantial. If you look at the volatility (which is where traders at banks make money) form NK, it was maybe 1/100 of that during the oil price crash 1.5 years ago.

 

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