The Boss of Morgan Stanley speaks concerning the Unfolding Banking emergency
The recent healthcare crisis has had cascading consequences on the economy. The chief executive officer of one of the country’s major financial institutions has offered a few choice words on the effect this is beginning to have in the banking industry. Less than two decades ago the world was rocked by the financial disaster that was brought on by the financial sector of the US due to reckless investment decisions by commercial banks. Will the next few months look like a slow-motion play back of 2008 or something else this time around?
Principal Statistics and Market Performance measurements in the Banking sector
There has been an consequence on more than only one banking institution and in more than one economic activity. This is the most widespread disturbance that the system has seen since the Great Depression by some reports. At the beginning of the year, banks throughout the world were consistently setting records on quarterly earnings and yearly profits. Today numerous banks are starting to question if there is a chance they could lose solvency without government financial support.
Current Trading Activities are quite encouraging
This is the one bright spot in the market for banks right now. After some of the recent government intervention and the quantitative easing by the Federal Reserve, there has been a improvement to the stock values. The only major problem here is there is still quite some distance to go up before they return to earlier highs.
Wealth Management Activities are not as assuring as trading activities
Wealth management has come to be an extremely large part of many banking institution’s revenue sources over the last few decades. Morgan Stanley, for example, has declared roughly half of their yearly revenue comes from this division of their organization. This division also saw a decrease of nearly 8% in the last quarter in this area.
Fourteen percent drop in Investment Management activity is reason for concern
Today it is not only the wealthy who invest. More and more people from many socioeconomic groups have been able to access investments. This has produced a appreciable share of the revenue stream for Morgan Stanley roughly one quarter what their wealth management generated for the company. This division fell by 14 percent in the last quarter as well.