Dear WSO,
Title is self explanatory - if anyone with experience/knowledge on the matter can shed some light, that would be much appreciated as I'm trying to get my head around this.
Bloomberg cites the following reasons for the drop in profits:
"One reason is low volatility -- especially in the oil market -- that makes companies and investors less inclined to undertake large trades."
"Another reason is the regulatory restrictions on speculative and physical trading that have reduced the range of opportunities available to banks."
If banks no longer take any substantial proprietary risk, how did these losses accrue? To my understanding, they could "under hedge" themselves as the counterparty to their client, thus being partially exposed to certain markets. Is that what has happened here?
How much risk do banks take these days on their own balance sheets?
Your thoughts appreciated.
Hey kmc101, I think you deserve a response...heck, everyone does. We're listening, sorry about the delay ...my best guess at places on WSO that could help:
Maybe one of our professional members will share their wisdom: John-Schwenck Utkal Keshari-Pradhan Keseza
Fingers crossed that one of those helps you.
Goldman Commodities Profits - what's going on? (Originally Posted: 02/02/2018)
Dear WSO,
Title is self explanatory - if anyone with experience/knowledge on the matter can shed some light, that would be much appreciated as I'm trying to get my head around this.
Bloomberg cites the following reasons for the drop in profits:
"One reason is low volatility -- especially in the oil market -- that makes companies and investors less inclined to undertake large trades."
"Another reason is the regulatory restrictions on speculative and physical trading that have reduced the range of opportunities available to banks."
If banks no longer take any substantial proprietary risk, how did these losses accrue? To my understanding, they could "under hedge" themselves as the counterparty to their client, thus being partially exposed to certain markets. Is that what has happened here?
How much risk do banks take these days on their own balance sheets?
Your thoughts appreciated.
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