Report - investment banks likely to shrink 10-15% in next 2 years

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Investment banks are likely to shrink by another 10 to 15% in the next two years as they cut back their trading desks due to the impact of tougher regulations, a study said.

Reuters reports that will reduce market liquidity and could raise trading costs for asset managers, forcing them to invest more in trading capabilities, according to the study by Morgan Stanley and consultancy Oliver Wyman.

New rules introduced since the 2007/09 financial crisis require banks to hold more capital for trading activities, making these areas less profitable and prompting cuts to trading desks.

To access the complete Reuters article hit the link below:

Investment banks to shrink by 10-15 pct more as regulation bites -study

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