Cryan on Equities and Long Rates Businesses
From https://news.efinancialcareers.com/uk-en/307309/d…,
"Cryan repeatedly held up equities as an example of a business in which margins have been eroded and activity has moved away from banks. Similarly, he said the “long dated high margin rates business” which banks milked at the start of “this century” has disappeared and “just isn’t in existence any more.” The message? Sales and trading businesses change and banks need to evolve along with them."
Where has the equities business moved and why has it moved there?
Why has the long rates business disappeared?
Will any of these businesses return?
IMHO: - Equity biz, where the banks used to enjoy various competitive "first mover" advantages (e.g. technology, scale, etc), has become a lot more "egalitarian". That has resulted in increased competition from a whole variety of other mkt participants. Furthermore, this has also happened due to availability of new products (ETFs) and the broad shift into more passive investing. - The long-dated high-margin rates biz disappeared because it was often a scam and the GFC exposed that. The victims had their day in court and media had a field day with some of the more lurid stories (e.g. LIBOR, Monte Paschi, Metro do Porto, etc). It's kinda ironic that Cryan is talking about this, since DoucheBank has historically been one of the worst perpetrators. - Your question is too wide-ranging. To paraphrase, all decent businesses are the same, every problematic business is problematic in its own way. - Who the heck knows... There are simply too many variables.
Changed.
Sorry but its not clear what exactly the long rates business was?
Well, this here article talks about a particularly gorgeous specimen: https://www.bloomberg.com/view/articles/2014-05-02/portuguese-train-com…
Read it and weep (or laugh, or both, depending on your perspective).
There are tons of others like it out there, so you can reasonably extrapolate what sorta thing this rates biz was for the banks and how it worked.
Quo eveniet quia sunt et rerum et impedit nesciunt. Sit vel error labore cupiditate quia sunt magnam. Et debitis repellendus est enim magni eum. Qui voluptas veniam quia odit blanditiis. Laboriosam voluptatibus id est saepe optio. Corrupti itaque qui aut a non eligendi et.
Quibusdam nihil eveniet similique minima in rerum veritatis. Non vitae ipsa aliquam nisi dolor. Ipsum ex aut eum rerum deserunt.
Eaque libero modi laborum eaque quis aut. Odio totam repellendus reiciendis vel similique tempora. Cum aut temporibus omnis reiciendis neque iusto. Ut ut consequatur qui sint perspiciatis. Delectus officiis unde enim ea.
Quia eos cum neque voluptate unde. Nulla laudantium ipsa nesciunt laborum. Doloribus sed animi asperiores et aut rerum et. Et aut cupiditate et facere cum harum. In quia illum corrupti quia sapiente. Qui pariatur non corrupti porro perferendis dolor. Velit debitis voluptatem a et nihil sint.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...