The CEO of Morgan Stanley comments on the Unfolding Banking crisis
The present healthcare crisis has had cascading effects on the economy. The chief executive officer of one of the country’s premier 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 emergency that was precipitated out of the financial sector of the US due to careless investment behaviours by commercial banks. Will the next few months look like a slow-motion replay of 2008 or something else this time around?
Crucial Statistics and Market Performance analytics in the Banking sector
There has been an consequence on more than just one banking institution and in more than one economic activity. This is the most prevalent disturbance that the system has seen since the Great Depression by some reports. At the beginning of the year, banks around the world were regularly setting records on quarterly earnings and yearly profits. Today many banks are starting to question if there is a risk they could lose solvency without government financial support.
Present Trading Activities are rather inspiring
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 problem here is there is still quite some distance to go up before they return to previous highs.
Wealth Management Activities are not as appealing as trading activities
Wealth management has grow to be an significantly large part of most 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 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 many socioeconomic classes have been able to access investments. This has generated a significant 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.