The Boss of Morgan Stanley comments concerning the Unfolding Banking disaster
The recent healthcare crisis has had cascading consequences 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 starting 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 reckless investment decisions by commercial banks. Will the next few months look like a slow-motion replay of 2008 or something else this time around?
Key Statistics and Market Performance metrics in the Banking industry
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 consistently setting records on quarterly earnings and yearly profits. Today numerous banks are beginning to question if there is a risk they could lose solvency without government help.
Latest Trading Activities are very reassuring
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 drawback here is there is still quite some distance to go up before they return to past highs.
Wealth Management Activities are not as assuring as trading activities
Wealth management has grow to be an increasingly large part of most banking institution’s revenue streams over the last few decades. Morgan Stanley, for example, has reported roughly half of their yearly revenue comes from this department of their organization. This division also saw a decline of nearly 8% in the last quarter in this area.
14% drop 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 classes have been able to have access to investments. This has resulted in a appreciable 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.