The present 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 starting to have in the banking industry. Less than two decades ago the world was rocked by the financial emergency that was precipitated out of 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?
Essential Statistics and Market Performance measurements in the Banking world
There has been an effect on more than just one banking institution and in more than one economic activity. This is the most prevalent disruption 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 numerous banks are beginning to question if there is a chance they could lose solvency without government help.
Current Trading Activities are very reassuring
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 downside 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 come to be 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 department of their organization. This division also saw a decline of nearly 8% in the last quarter in this area.
14% decrease in Investment Management activity is reason for concern
Today it is not only the wealthy who invest. More and more people from all socioeconomic classes 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 tumbled by 14 percent in the last quarter as well.