Macaskill on the markets: Goldman’s move to build a more balanced bank signals a shift for whole industry
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
Goldman Sachs posted weak fourth-quarter results in January and released a code of revised business principles that threatened to slow its legendary speed in closing deals.
The two events can be taken as a sign of a weakened investment banking industry in 2011 and beyond, where lower fixed-income revenues and regulatory constraints undermine profitability. But they also mark a levelling of the competitive playing field, with a coming emphasis on equities and advisory growth.
The slump in Goldman’s fixed-income trading numbers certainly signals a shift for the industry, with implications for the career prospects of individual senior bankers – at Goldman and elsewhere.
The 48% fall in client revenues for Goldman’s fixed-income, currency and commodities (FICC) group from the comparable quarter in 2009 was a clear disappointment. Under the firm’s new split reporting lines, FICC client revenues were just $1.64