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Industry Risk For Investment Banking Is Generally Higher Than For Other Financial Institutions Jan 11 Product Image

Industry Risk For Investment Banking Is Generally Higher Than For Other Financial Institutions Jan 11

  • ID: 1753572
  • January 2011
  • Standard & Poors

FEATURED COMPANIES

  • Bank of America Corp.
  • Barclays PLC
  • BNP Paribas
  • Citigroup Inc.
  • Credit Suisse Group AG
  • JPMorgan Chase & Co.
  • MORE

Abstract
In Standard & Poor's Ratings Services' view, investment banking has different industry risk characteristics than traditional lending. Investment banking is generally riskier and more volatile. The industry's typical funding profile renders the sector more vulnerable to confidence erosion and liquidity constraints during times of financial stress than are retail deposit-funded institutions. Investment banks therefore have a higher fatality rate than commercial banks do. In fact, investment banks' financial performance is highly subject to capital-market conditions, which are inherently cyclical in terms of pricing and volume. An uncertain economic outlook that tempers corporate activity, and investors' varying tolerances to risk contribute to volatility for investment banks. In addition, the large investment banks are often highly leveraged with considerable principal credit- and...

Companies mentioned in this report are:
- Bank of America Corp.
- BNP Paribas
- Portigon AG (Unsolicited Ratings)
- Morgan Stanley
- JPMorgan Chase & Co.
- Citigroup Inc.
- Credit Suisse Group AG
- The Goldman Sachs Group Inc.
- UBS AG
- Nomura Holdings READ MORE >

Note: Product cover images may vary from those shown

- Bank of America Corp.
- BNP Paribas
- Portigon AG (Unsolicited Ratings)
- Morgan Stanley
- JPMorgan Chase & Co.
- Citigroup Inc.
- Credit Suisse Group AG
- The Goldman Sachs Group Inc.
- UBS AG
- Nomura Holdings Inc.
- Barclays PLC

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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