Hey Monkeys,
Recently came across this Forbes Article that was published in response to Barclay's decision last week to dissolve much of their IB efforts. Really interesting read, here are some highlights:
CEO of Morgan Stanley, James Gorman, thinks true independent investment banks are dead. “The investment banking industry for all intents and purposes has disappeared,” he said at a conference in Manhattan.
Even the American giants Goldman Sachs, Citigroup and Bank of America are under pressure to cut costs and make better use of scarce and expensive capital. We have not seen the last of serious cuts to investment banking. Remuneration, particularly, will eventually face the axe, although – perhaps understandably – investment banks have so far preferred to cut jobs rather than risk losing star players.
Investment banking itself is not dead. There will always be a need for the services that investment banks offer: M&A activity is starting to increase again after being flat for the last few years, and corporate investment is also expected to rise. Wealth and Asset Management, too, seem set to become increasingly important as the world’s capital glut shows no sign of dissipating and interest rates remain stubbornly low.
What does seem to have ended – for the moment – is banks primarily making money by doing leveraged trades with each other. Proprietary trading is dead: customer service is the latest fashion in banking.
Overall reactions to this article?
- Is investment banking a dying industry?
- Which divisions have the most potential for future growth?
Not this again.
It's not as bad as "Is trading dead?"
What crap.
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