Grim News At Banking Conference

10 years ago

While many senior banking executives met at the UBS Warburg Global Financial Services conference last week to discuss the current state of the industry, the views of the great and the good were hardly encouraging.

Morgan Stanley Chief Financial Officer Stephen Crawford said that sales and trading revenues had fallen off in the second quarter so far. He also alluded to tough conditions in the M & A market for the rest of the year.

Geoffrey Boisi, the vice chairman of investment banking at JP Morgan, confirmed that the bank had too many bankers and not enough clients. The bank is expected to cut up to 500 investment banking jobs shortly.

John Mack, the chief executive of Credit Suisse First Boston stated: 'I think that we're at overcapacity,' despite the fact that Wall Street culled 45,000 jobs in the year to February. This was the biggest decline since 1974.

Finally, UBS America Chairman Donald Marron expressed his view that 'consolidation is going to continue.'

2001 was a difficult year for the investment banking industry. If the men at the top are correct, then 2002 is likely to be worse.