Morgan Stanley CEO: Investment Banking Is Over
http://www.cnbc.com/id/101651044
I doubt IBD is over completely as there is always a demand for M&A/IPO etc activity.
What are your thoughts on this?
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I think he is referring more to the S&T sort of functions which are being cut back at places like BarCap as well. I doubt that he means traditional IBD and GCM-type stuff as MS is doing really well in M&A and is pretty good in ECM as well.
Definite culling of FICC, feeling heat everywhere.
your title was hyperbole, but what they're talking about is (as above posters mentioned) lower S&T revenue because of decreased volatility (vol tends to decrease in up markets, a la 2013). until corporate balance sheets deteriorate, IB will continue to be strong because companies are not growing their top lines, but growing in productivity. Gorman is simply allocating capital as best he sees fit. 50% of MS revenues come from PWM, a predictable business because most of it is recurring, fee based revenue, rather than transactional and deal based as is IB. he's more wont to allocate resources there and to IB than he is to FICC as torchic suggested given the difficult interest rate environment we have.
IB provides a service, and it's not going anywhere, it's been around for hundreds of years in some fashion, and I think it is here to stay. that being said, it will ebb & flow as it always has, so this isn't really "news," just a CEO who's trying to allocate capital properly and CNBC not having anything better to do.
He mentions the true Investment Banks are done, which is correct. Bear, Lehman, Merrill are all gone, MS and GS converted to bank holding companies. All these firms are now "hybrid" banks with much more regulation.
lol CNBC quoted Buzzfeed as a legitimate source.
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