The Big Unwind Hits Investment Banking

Everyone but China.
The meme has been that central-bank-imposed low interest rates and negative interest rates are killing bank earnings, and that oil-and-gas loan loss reserves maul what’s left of these earnings. But it’s tough for banking all around, as the global QE bonanza is bumping into real-world limits. And the Big Unwind has started.
For investment banking revenues, a key income source for ‘systemically important’ banks, it has been one heck of a terrible first quarter, according to Dealogic’s preliminary Global IB Strategy Review. And the damage will show up in earnings reports soon.
If, in the list of fee mayhem below, you frequently stumble across phrases like ‘plunged,’ ‘plummeted,’ ‘lowest since Q1 2009′ when the bond market imploded during the Financial Crisis, or ‘lowest since Q1 2001′ when the dotcom and IPO bubble imploded, it’s because that’s the kind of quarter it has been for investment banks and their lifeblood: extracting big-fat fees coming and going.

This post was published at Wolf Street by Wolf Richter ‘ March 24, 2016.

 

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