The Boss of Morgan Stanley speaks regarding the Unfolding Banking catastrophe
The latest healthcare crisis has had cascading consequences on the economy. The chief executive officer of one of the country’s major financial institutions has provided 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 catastrophe that was precipitated out of the financial sector of the US due to careless investment activities 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 metrics in the Banking markets
There has been an consequence on more than just one banking institution and in more than one economic activity. This is the most extensive disturbance that the system has seen since the Great Depression by some accounts. At the beginning of the year, banks around the world were frequently setting records on quarterly earnings and yearly profits. Today numerous banks are starting to question if there is a potential they could lose solvency without government assistance.
Current Trading Activities are very motivating
This is the one bright spot in the market for banks right now. After a few of the recent government intervention and the quantitative easing by the Federal Reserve, there has been a boost to the stock values. The only major disadvantage here is there is still quite some distance to go up before they return to previous highs.
Wealth Management Activities are not as encouraging as trading activities
Wealth management has grow to be an extremely large part of most banking institution’s revenue streams over the last few decades. Morgan Stanley, for example, has declared roughly half of their yearly income comes from this department of their organization. This division also saw a decline of nearly 8% in the last quarter in this area.
14% decrease in Investment Management activity is reason for concern
Today it is not merely the wealthy who invest. More and more people from almost all socioeconomic groups have been able to access investments. This has provided a considerable share of the revenue stream for Morgan Stanley roughly one quarter what their wealth management generated for the company. This division tumbled by 14 percent in the last quarter as well.