Seeking Alpha

Breakups of the big banks beginning?

  • Amid a number of challenges to bond trading facing the large banks - namely declining revenue and tougher capital rules - Credit Suisse (CS) is considering spinning off its recently-formed Wake USA, which last month began taking trades in Treasurys and Treasury futures, reports the WSJ.
  • "It's a novel idea," says Larry Tabb of Tabb Group. "By partnering with Tower [a developer of electronic-trading technology], Credit Suisse keeps their client relationships, solves their regulatory capital issues, as well as providing better and tighter pricing to their clients."
  • For Credit Suisse, turning Wake into an independent company would allow the bank to keep a share of the profits from client trades without having to set aside additional capital.
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