Bank research: Research now a key differentiator for banks
Sovereign debt crisis increases client demand for research; Pending capital requirements push banks to advice-based model
Many banks have moved in and out of research over the past decade but it is now being viewed again as one of the key business lines. Those banks that have been behind the curve in research have been adding strategies and economists, recruiters say, and there is a greater push to higher-calibre content.
"Focus on US treasuries or the Bund revolved around monetary policy and inflation. That has changed and now clients are looking for research on developed countries’ debt sustainability"
Much of the increased demand for research has stemmed from the sovereign debt crisis in Europe and concerns about the US deficit. Larry Kantor, head of research for Barclays Capital, says that clients are looking for insights. "Post World War Two, non-emerging-market sovereign debt sustainability was never really considered," he says. "Focus on US treasuries or the Bund revolved around monetary policy and inflation – never about solvency and ability to pay. That has changed and now clients are looking for research on developed countries’ debt sustainability."