Analysis Of Three Financial Companies Post Great Recession

Unfortunately, the improvements in earnings and loan losses have not extended to Banks’ operating revenues. Banks’ operating revenues are not growing due to “lower servicing income (down $8 billion), reduced gains on loan sales (down $4.8 billion), and lower income from service charges on deposit accounts, which fell by $2.1 billion (5.9 percent).” (FDIC Quarterly, p.2)

As the world emerges from the global financial crisis, banks find themselves in a challenging environment. Low interest rates are making it difficult to generate

A. Introduction B. Financial Crisis C. The Economic Environment D. Competition E. Changes F. Conclusion G. Exhibits H. Work Cited 3 5 8 9 10 12 13 15

The collapse of Lehman Brothers, a sprawling global bank, in September 2008 almost brought down the world’s financial system. Considered by many economists to have been the worst financial crisis since the Great depression of the 1930s. Economist Peter Morici coined the term the “The Great Recession” to describe the period. While the causes are still being debated, many ramifications are clear and include the failure of major corporations, large declines in asset values (some estimates put the drop in the trillions of dollars range), substantial government intervention across the globe, and a significant decline in economic activity. Both regulatory and market based solutions have been proposed or executed to attempt to combat the causes and effects of the crisis.

The Great Recession was best known during the late President Bush into Obama era. Great Recession defined as; the economic slump began when the U.S. housing market went from boom to bust and large amounts of mortgage-backed securities and derivatives lost significant value (Investopedia.com). As the housing market was crashing, houses and business buildings have become vacant which the per capita rate for many cities dropped. The issue forced gas prices and goods to increase to make up for the loss per capita rate percentage. The economy doesn’t see the big picture when prices rise and interest decreases, hurting, value and profits within businesses throughout country continue bringing down markets. Take Johnstown Pennsylvania for example; the city was known for the leading steel manufacturing companies. With the market declining with facts from 2000-2010 census data, Johnstown Pennsylvania has lost over 5 % of

The Great Recession began in late 2007 and quickly spread throughout the world. The downturn provided continuous high unemployment, a spreading foreclosure crisis, and minimal consumer spending.The crisis threatened the viability of financial institutions with deep exposure to defaults and foreclosures (Love & Mattern, 2011). Bank after bank were either closing down or merging just to stay afloat. This led to banks reducing their lending which made it both difficult and expensive to borrow money. This fall in consumption and investment led to businesses decreasing labor which further hurt GDP and unemployment saw an all-time high. This effect was not only felt in the United States. Countries that had exposure to the US also suffered from the

Morgan Stanley is a global financial business firm serving a diversified group of corporations, governments, financial institutions, and individuals in 36 countries around the world, and sets its headquarter in New York City. The main areas of business for the firm today are Global Wealth Management, Institutional Securities and Investment Management. Morgan Stanley settled its Asia Pacific headquarters in Hong Kong in 1987 and its main business helps shape global views on China and the Asia Pacific region. The Morgan Stanley of Hong Kong provides services to clients in investment banking, real estate, private equity, equity and securities trading, derivatives, prime brokerage, private wealth management and investment

“Experience, according to the proverbial wisdom, is a great teacher, also we should learn from our mistakes, Or, if you prefer, good judgment comes from experience, and experience comes from bad judgment” (Greenberg, Alan). A firm understanding of the events that lead up to the financial crisis of 2008 is an essential learning lesson to all Americans, the recession experienced in the United States was felt globally. The collapsed of Bear Stearns was the beginning of a financial disaster that would take years to offset. The fall of Bear Stearns was so important to the financial history of the American economy, Professors at Harvard University developed a case study and in 2009 and began to teach the case study jointly to first year finance and corporate leadership

The recent financial crisis has a huge impact on systemic Important Financial Institutions; it’s distressing effect can be felt in almost every business area and process of a bank. A fairly large literature investigates the impact of financial crisis on large, complex and interconnected banks. The great recession did affect banks in different ways, depending on the funding capability of each bank. Kapan and Minoiu (2013) find that banks that were ex ante more dependent on market funding and had lower structural liquidity reduced supply of credit more than other banks during crisis. The ability of banks to generate interest income during the financial crisis was hampered because there was a vast reduction in bank lending to individuals and

Extensive research has determined that the banking industry is in an unstable state. The industry’s profits have

In 2008, the financial industry dominated the market. Bankers were giving themselves hefty bonuses with which they purchased yachts, vacation homes, jets, cars, etc. “Finance is supposed to be a service industry, an aid to the business of genuine wealth creation,” says Sean Corrigan, who oversees more than $8 billion as chief investment strategist at Diapason Commodities Management in Lausanne, Switzerland. “Once we accord banks the sort of overblown importance they have enjoyed this past quarter of a century, we become hostage to the megalomania of their executives and head traders.” (Gilbert, 2010)

The ‘sub-prime’ crisis triggered by the meltdown of the US mortgage backed-securities market in 2007 was a precursor to the global financial crisis. It would drastically change the competitive landscape for all firms in the financial services sector, including Campbell and Bailyn (C&B), one of the world’s five largest investment banks.

The banking industry is highly competitive. The financial services industry has beenaround for hundreds of years and just about everyone who needs banking servicesalready has them. Because of this, banks must attempt to lure clients away fromcompetitor banks. They do this by offering lower financing, preferred rates andinvestment services. The banking sector is in a race to see who can offer both the

The 2007-2008 financial crisis is seen as one of the biggest failure of risk management. This is the reason why it has been described it as a credit tsunami.

Analysis • Analyzing the industry context – What are the trends in the investment banking industry affecting Campbell and Bailyn in 2007? – Product specialization – Move toward commoditization in some segments of industry. – Increasing sophistication of customers  Analysis •