| On December 8th, Morgan Stanley tactically announced plans to eliminate 1,200 jobs. 470 of those jobs belonged to bond and commodity traders and salespeople. More bad news. In the third quarter, Morgan Stanley posted a 42% fall in fixed income trading revenue. The investment bank is taking a US$ 150 million charge in its fourth quarter. Morgan Stanley, Credit Suisse and other banks are changing their stripes, shedding banking in favor for wealth management, especially in Asia.
Besides prolonged low interest rates and stricter banking regulations, part of this business trend can be blamed by more asset owners becoming their own banks. The era where large investment banks control and command fixed income markets is slowly fading, as colossal pensions and sovereign investors can ramp up internal capabilities and generate yield from their massive balance sheets. Today, the sovereign wealth fund market is over US$ 7 trillion in assets...............................................Full Article: Source
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