Investment bankers in search of a new business model

[flashl]

Seismic shift coming in how banks make and sell loans; focus on underlying assets

Reuters—However long or deep the credit crisis turns out to be, it will change the business of investment banking profoundly, probably for good.

...

The mortgage meltdown has led to a collective loss of faith in structured finance, credit ratings and the banking industry itself.

The upshot for banking: job losses, capital losses, balance sheets that need to be rebuilt, lower profit margins and an industry in search of a business model.

...

“We haven’t seen anything as bad as this in the 30-year period we looked at,” said James Davis at consultants Oliver Wyman, who recently conducted a review of investment banking with Nick Studer at Wyman and Huw van Steenis at Morgan Stanley. “You’d probably have to go back to the 1930s to get something quite as bad.”

The study takes as a base case that net revenue in investment banking falls 18% this year, but might fall as much as 45% in a “bear” scenario.

Financial Week

[MikeNearMcChord]

1. How about investing in good paying jobs., schools among other things.

But hey I am just a lumpen.

[crazymans economics]

2. Or how about investing in restoring the manufacturing base...

and not focusing on seeing how many bad loans they can give out?

But, I'm just a crazyman!

[sendero]

3. Might I suggest....

.... mass defenestration?

[Nay]

4. ...but you're talking about creatures with no honor. They wouldn't

do that to themselves, no matter how guilty they were of anything. They were happy to do it to us, tho.

[stopfascism]

5. how about Paulson changing existing laws

they no longer have to search for a new model...Paulson is doing it for them!