The Chief Executive Officer of Morgan Stanley comments regarding the Unfolding Banking emergency
The latest 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 beginning 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?
Leading Statistics and Market Performance measurements in the Banking industry
There has been an impact on more than just one banking institution and in more than one economic activity. This is the most prevalent interruption that the system has seen since the Great Depression by some accounts. At the starting of the year, banks throughout the world were routinely setting records on quarterly earnings and yearly profits. Today many banks are starting to question if there is a chance they could lose solvency without government reinforcement.
Latest Trading Activities are rather inspiring
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 problem here is there is still quite some distance to go up before they return to earlier highs.
Wealth Management Activities are not as promising 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 revenue comes from this division of their organization. This division also saw a drop of nearly 8% in the last quarter in this area.
14% decline in Investment Management activity is reason for concern
Today it is not exclusively the wealthy who invest. More and more people from almost all socioeconomic groups have been able to access 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 fell by 14 percent in the last quarter as well.