The most dominant banks in each market are tightening their grip.
Bloomberg News reports that JPMorgan generated $3.96bn in fixed-income trading revenue in the second quarter, accounting for almost one of every three dollars generated by the five biggest U.S. banks for the period. Morgan Stanley, No. 1 in equity trading, posted $2.15bn in revenue from that business Wednesday, beating analysts’ estimates and opening its largest lead since wresting the title from Goldman Sachs a year ago.
“The strong will get stronger,” said Christopher Wheeler, an analyst at Atlantic Equities. “It becomes much more pronounced if markets improve even more because it’s the same clients just doing more stuff, and those clients are locked in to the biggest players.”
Years after new rules fundamentally changed the dynamics of Wall Street’s trading rooms, the most dominant banks in each market are tightening their grip. The results may clarify what the landscape of Wall Street will look like once companies adapt to restrictions that make inventory more expensive and outlaw trading for the firms’ own accounts.
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