The following is an excerpt from Donal Griffin | May 24, 2016 | Bloomberg.com |
The world’s biggest banks have shed about one in three bond traders since 2011 as rules making some businesses less profitable dovetail with volatile markets that are spooking investors, according to research from Coalition Development Ltd.
The total count of fixed-income, currency and commodity traders and salespeople at global banks was 18,300 in the first quarter of 2016, 32 percent less than the same period five years ago, Coalition data shows. Headcount fell 5 percent from a year earlier as lenders including Credit Suisse Group AG, Morgan Stanley, Deutsche Bank AG and Goldman Sachs Group Inc. fired workers in so-called FICC businesses to cut costs.
Regulators seeking to avoid another financial crisis have limited banks’ leverage when trading fixed-income products, making those businesses less profitable and prompting lenders to scale back operations. The new rules have coincided with a slump in commodity prices and a slowdown in the Chinese economy that helped bring about what Coalition described as the the weakest start to the year for the industry since the financial crisis.
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