The CEO of Morgan Stanley speaks concerning the Unfolding Banking catastrophe
The latest healthcare crisis has had cascading effects on the economy. The chief executive officer of one of the country’s leading 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 crisis that was precipitated out of the financial sector of the US due to reckless investment behaviours by commercial banks. Will the next few months look like a slow-motion replay of 2008 or something else this time around?
Principal Statistics and Market Performance analytics in the Banking sector
There has been an impact on more than just one banking institution and in more than one economic activity. This is the most extensive interruption that the system has seen since the Great Depression by some accounts. At the beginning of the year, banks around the world were regularly setting records on quarterly earnings and yearly profits. Today many banks are beginning to question if there is a potential they could lose solvency without government reinforcement.
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 improvement 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 encouraging as trading activities
Wealth management has become 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 income comes from this division of their organization. This division also saw a slide of nearly 8% in the last quarter in this area.
Fourteen percent decline in Investment Management activity is reason for concern
Today it is not exclusively the wealthy who invest. More and more people from all socioeconomic classes have been able to have access to investments. This has resulted in a major 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.