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.
If you are subscribed and having an account error please clear cache and cookies if that does not work email [email protected] or click Chat.