Standard & Poor's Ratings Services' industry credit outlook for the major investment banks and brokers is negative. The outlook reflects four main issues, which incrementally weigh negatively on the ratings on the companies covered in this report card: Increased risks that underlying revenues excluding write-downs for the industry as a whole could decline further than the anticipated 20%-30%, which are incorporated into our ratings. Ongoing global repricing of risks means that market valuations remain fragile. In addition, while markdowns on subprime mortgage-related exposures are likely to peter off for the industry, other areas remain exposed. Structural issues concerning some players' lower diversification in funding sources compared with universal banks in an environment where availability of wholesale liquidity continues to be...
Companies mentioned in this report are:
- Deutsche Bank AG
- Merrill Lynch & Co. Inc.
- Lehman Brothers Holdings Inc.
- Morgan Stanley
- JPMorgan Chase & Co.
- Citigroup Inc.
- Credit Suisse Group AG
- The Goldman Sachs Group Inc.
- UBS AG
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues. SHOW LESS READ MORE >