The Boss of Morgan Stanley comments concerning the Unfolding Banking crisis
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 beginning to have in the banking industry. Less than two decades ago the world was rocked by the financial disaster that was brought on by the financial sector of the US due to reckless 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?
Key Statistics and Market Performance metrics in the Banking markets
There has been an effect on more than only one banking institution and in more than one economic activity. This is the most extensive disruption that the system has seen since the Great Depression by some reports. At the beginning of the year, banks around the world were routinely setting records on quarterly earnings and yearly profits. Today numerous banks are starting to question if there is a potential they could lose solvency without government support.
Recent Trading Activities are very motivating
This is the one bright spot in the market for banks right now. After some 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 problem 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 many banking institution’s revenue sources 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 decline of nearly 8% in the last quarter in this area.
14% decline in Investment Management activity is cause for concern
Today it is not solely the wealthy who invest. More and more people from almost all socioeconomic groups have been able to have access to investments. This has generated 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.