Why scale matters: We happy few

Posted: May 10, 2013 in economy
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Twilight of the gods

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Why scale matters


Investment banking is increasingly becoming a game of winner-takes-all

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MOST INVESTMENT BANKERS think a lot of themselves, but they seldom crow about their competitors’ troubles in public. So it came as a surprise when Gary Cohn, the president of Goldman Sachs, told a press conference in Brazil in April that banks other than his and JPMorgan were “taking a pretty substantial step back from the markets” in a way that had not been seen “in the entire history of banking”.
He was not exaggerating. Across the world the investment-banking industry is caught up in an unprecedented wave of deleveraging and deglobalisation. In large parts of the rich world most banks are shrinking their balance-sheets, retreating from foreign operations and closing businesses. This is dramatically reshaping the industry. In future it will increasingly be polarised into, on one hand, a …

via Economic Crisis http://www.economist.com/news/special-report/21577185-investment-banking-increasingly-becoming-game-winner-takes-all-we-happy-few?fsrc=rss


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