The Big Unwind Hits Investment Banking

by Wolf Richter
Wolf Street

Everyone but China.

The meme has been that central-bank-imposed low interest rates and negative interest rates are killing bank earnings, and that oil-and-gas loan loss reserves maul what’s left of these earnings. But it’s tough for banking all around, as the global QE bonanza is bumping into real-world limits. And the Big Unwind has started.

For investment banking revenues, a key income source for “systemically important” banks, it has been one heck of a terrible first quarter, according to Dealogic’s preliminary Global IB Strategy Review. And the damage will show up in earnings reports soon.

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