Investment Banks Low ROE Necessitates 'Radical Changes': EY
Investment bank ROEs have been in steady decline since 2009, falling to 7.8% in 2014. The combination of pressure from low cost financial products like ETFs, the costs of regulatory compliance, and competition from private equity and hedge funds have simply made the business less profitable than it once was and a new Ernst & Young report argues that even getting back to 10% ROE will be impossible without radical change.
“The days of leverage-inflated, 20%-plus returns on equity are long gone. The once-lofty . . .
This content is exclusively for paying members. Access all of our content on including years of timeless investment news and in depth analysis for only a few dollars a month by signing up here while also supporting quality content and journalism, or learn more about our premium content here
If you are subscribed and having an account error please clear cache and then cookies if that does not work email email@example.com and we will get back to you as quick as humanly possible