The Boss 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 starting to have in the banking industry. Less than two decades ago the world was rocked by the financial catastrophe that was brought on by 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 measurements in the Banking markets
There has been an impact on more than just one banking institution and in more than one economic activity. This is the most widespread interruption 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 numerous banks are beginning to question if there is a potential they could lose solvency without government financial support.
Current Trading Activities are rather 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 problem here is there is still quite some distance to go up before they return to earlier highs.
Wealth Management Activities are not as appealing as trading activities
Wealth management has grow to be an increasingly large part of most banking institution’s revenue sources 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 decrease of nearly 8% in the last quarter in this area.
Fourteen percent fall in Investment Management activity is reason for concern
Today it is not only the wealthy who invest. More and more people from all socioeconomic classes have been able to have access to 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 dropped by 14 percent in the last quarter as well.