Not letting a crisis go to waste

3 March 2010 By Nicholas Paisner

Western government deficits will weigh on the markets for a while. That doesn’t bode well for investment banks issuing junk bonds or underwriting IPOs. However, there is plenty of business in helping countries finance their deficits, and in trading currencies and sovereign debt.

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Deutsche Bank said on Feb. 4 that sales and trading revenues in the fourthquarter of 2009 were lower than in the previous quarter as a result of "low volatility, markedly lower client activity in November and December, and continued normalization of margins."

UBS said on Feb. 9 that "lower volumes and more limited trading opportunities" had reduced revenues at its investment bank. The firm also said that "client activity levels were high in January."

Credit Suisse said on Feb. 11 that "fixed income and equity trading revenues impacted by weaker volumes, a marked slowdown in client activity in November and December and lower volatility." The bank also said that "we have had a strong start to the quarter with strong client activity."

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