ResourceWise

Massive Cuts Required to Restore Investment Bank Returns

Investment Banking needs a dramatic overhaul of its business model if it is to ever make money for the share-holder. If 50% of gross revenue is paid as compensation, what does the bottom line look like after all the other operating expenses - travel, technology, premises, support services are taken into consideration and taxes are deducted? All the US Investment Banks have opted to become commercial banks; therefore investment banking becomes one more product offered to corporate clients - no longer a stand-alone business, simply because it cannot stand alone.