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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