investment-banking-model-is-dead-says-roche

Investment banking model is dead, says Roche

David Roche gives his view on what the financial sector will look like after the current credit crisis, which he says was created by excess liquidity and the shift to a "new monetarism" model.

By Anette Jönsson

September 28, 2008

The financial sector will look very different after the current financial crisis with a dramatic increase in regulation, slower credit growth and a forced return to a traditional relationship banking model where banks fund themselves primarily through deposits, argues David Roche, president of London-based global investment consultancy, Independent Strategy.

ôThe wholesale money markets are no longer going to fund financial sector balance sheets to the degree they did in the past on the basis of so little information. This together with new regulations and risk aversion will mean a much slower pace of credit growth,ö he said in a luncheon speech at the CLSA InvestorsÆ Forum on Friday. ôOf course, securitised debt and all that...

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