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Jon Macaskill is one of the leading capital markets and derivatives journalists, with over 20 years’ experience covering financial markets from London and New York. Most recently he worked at one of the biggest global investment banks |
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There is still likely to be a net reduction in liquidity, however. And shareholders should not expect a sudden smoothing of results from the sales and trading divisions of investment banks. The main dealers have already anticipated regulatory changes to ensure that they can continue to take risks by keeping hedging decisions intertwined with client flows. The collapse in equity sales and trading revenues at Goldman Sachs in the second quarter is unlikely to be the last nasty shock for shareholders from a botched hedging decision.
Goldman is among the US banks that have begun to send signals that their standalone proprietary dealing desks will be shut down well ahead of the...
