We assess prime broker estimated revenues for 2014 from physical financing and margin. We build on the methodology for finding prime brokerage revenue first published in “Which prime brokers are making the most money in securities lending?”, September 2013. This analysis includes further thinking about the value of internalization and the role of synthetic financing. There are some new winners in this year’s numbers. But in a declining physical market, is anyone really a winner?
You’ve seen the headlines by now: the European Central Bank’s stress tests showed 25 banks out of 130 with insufficient capital, and 12 of those have already raised further assets. The rest of Europe’s tested banks (82% of total bank assets) have gotten a clean bill of health. This sounds great on paper but caused us some concern. We wanted to know for example what passing or failing the test actually means. The answer is important for understanding how strong Europe’s banking system is today and how far it needs to go in the future for a full recovery.
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