|Investment Banking Glory Days not Likely to Return|
|by Tom McGregor||Tue, Dec 10, 2013, 09:33 PM|
The 2008 financial crisis bursted the investment banking bubble, and despite a rebound of the sector, investment banking powerhouses appear unlikely to regain enormous wealth and capture a larger share of the overall economy.
The Asia Times reports that, "The crash of 2008 seemed to put an end to the inexorable advance of financial services' share of the economy over the preceding quarter century. Yet in 2009-11 the financial sector rebounded, aided by ultra-low interest rates and a steep yield curve, locking in jumbo profits for even the doziest megabank."
In 2012, Goldman Sachs could only generate an annualized return of 9.5%.
According to the Asia Times, "The simplest evidence that finance is becoming less important is that, after decades of increase, financial sector wages are declining. The Financial Times recently reported that global investment banks are set to cut remuneration by 5% in 2013, the third successive year in which this has happened."
Meanwhile, critics of the financial sector contend that investment banks have lost their innovative spirit.
To read the entire article from the Asia Times, link here:
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