The Chief Executive Officer of Morgan Stanley speaks concerning 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 provided 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 dangerous 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?
Essential Statistics and Market Performance metrics in the Banking sector
There has been an effect on more than just 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 starting of the year, banks throughout the world were routinely 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 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 downside here is there is still quite some distance to go up before they return to previous highs.
Wealth Management Activities are not as assuring as trading activities
Wealth management has become an extremely 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 decline of nearly 8% in the last quarter in this area.
14% drop in Investment Management activity is cause 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 provided a considerable 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.