The latest healthcare crisis has had cascading effects on the economy. The chief executive officer of one of the country’s major 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 disaster that was brought on by 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?
Crucial Statistics and Market Performance measurements in the Banking markets
There has been an impact on more than only one banking institution and in more than one economic activity. This is the most prevalent disturbance 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 numerous banks are beginning to question if there is a possibility they could lose solvency without government help.
Present Trading Activities are quite reassuring
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 drawback 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 come to be an significantly large part of many banking institution’s revenue sources over the last few decades. Morgan Stanley, for example, has declared roughly half of their yearly revenue comes from this department of their organization. This division also saw a drop of nearly 8% in the last quarter in this area.
Fourteen percent drop in Investment Management activity is cause for concern
Today it is not exclusively the wealthy who invest. More and more people from almost all socioeconomic classes have been able to access 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 tumbled by 14 percent in the last quarter as well.