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Editorial Rating

7

Qualities

  • Analytical
  • Concrete Examples
  • Insider's Take

Recommendation

Changing technologies, impending regulations and evolving markets are just some of the reasons why returns on equity are falling in capital markets and investment banking institutions. Financial industry professionals at the Boston Consulting Group provide a useful guide to the trends and challenges facing these organizations, although, as you might expect, their report is somewhat jargon heavy. Professionals in financial markets and investments will find this report informative.

Summary

Senior managers in the capital markets and investment banking (CMIB) industry must drum up revenues while operating under increasingly constraining regulation. After-tax return on equity (ROE) for the industry fell to 11% in 2013, while revenues have slid 13% since 2010. Fixed income, currencies and commodities, which account for almost half of total CMIB revenues, fell 16% in 2013 alone. Other areas have helped offset the loss: Revenues from equities, most notably equity derivatives and cash equities, rose 21% in 2013, while investment banking revenues grew by 11%. However, meeting new regulatory requirements...

About the Authors

Philippe Morel et al hold various positions with the Boston Consulting Group, a global management advisory firm.


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