It has been a few years, but finally another bank has realized the futility of trying profitably to build or run an institutional equities strategy. ING and ABN Amro pulled out of the US market at the start of the decade, and Bank of America closed its European effort in 2003, but analysts, investors and bankers have been waiting for other players to pull out.
It finally happened at the start of August. The only problem was that it was not a wannabe big player that pulled out; it was Wells Fargo, the San Francisco-based commercial bank, fifth largest in the US by assets, whose CEO, Dick Kovacevich, has repeatedly pointed out that he has no interest in building an investment bank.
Realistic
Market players and observers were expecting – no, hoping – that it would be an institution with grander pretensions that would pull back from the market. Wachovia, perhaps, the fourth-largest US commercial bank that has this year been hiring aggressively in equities. Or one of the larger players that has spent longer trying to break into the market, such as Bank of America or even JPMorgan.
Such institutions, though, are sticking to their plans.