Banking And Securities Dealings Industry Essay

1899 Words Oct 17th, 2016 8 Pages
Investor Confidence NEGATIVE: The last 8 years have been challenging for the Investment Banking and Securities dealings industry. The industry’s role in the mortgage crisis damaged its brand and dried up once flowing revenue streams. In the process the crisis created an environment of regulatory scrutiny, consumer skepticism, and investor uncertainty that the industry has battled for almost a decade. As consumer confidence dropped and uncertainty rose the willingness to invest decreased resulting in an erosion of corporate profits. As explained by IBISworld, “Changes in corporate profit influence the performance of equities markets because they impact how companies are valued, which in turn influences trading and business activity. Higher trading and business activity levels enable investment banks to earn higher trading, underwriting and advisory revenue.” (IBISWorld) Thus, after 2009 the lack of trading and business activity led to annual decreases in revenue for 6 of the next 7 years (IBIS).

Legal NEGATIVE: Regulation has also been a negative consequence of the 2008 financial crisis. The Dodd-Frank consumer protection act of 2010 was created in reaction to the 2008 Financial Crisis and lack of regulations that contributed to the Mortgage bubble. In particular the Volcker Rule, which strips the investment banks ability to invest in proprietary trading with federal insured money (Federal Reserve). In addition to regulation, capital requirements for Investment Banks are…

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