Summary
NEW YORK (HedgeWorld.com) - Wall Street firms could suffer more in the second half of this year as a result of today's credit crisis than they did in 1998. Such a prediction, made in a report released this week by Standard & Poor's, carries some weight, since 1998 is known to be a particularly bleak year for the market, characterized by Russia's default on its debt, a stock market sell-off and the collapse of hedge fund Long-Term Capital Management, all of which resulted in steep losses for the investment banking and trading businesses of securities firms.
S&P predicted that revenues for investment banking and trading for the five largest brokers would drop by 47% in the second half of this year, more than in 1998 when revenue for those two combined businesses declined by 31%.See the full content of this document
Extract
S&P: 2007 to Be Worse Than 1998 for Banks
The greater decline in revenues today is the result of a combination of three main factors, said Nick Hill, a London-based analyst and co-author of the report, in an interview.
The first factor is the potential markdown of lever...See the full content of this document
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