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March 13, 2013

The brave new world of derivatives regulation will trim investment bank’s profits

Not that this is big news or surprising at all – but a good summary over at Bloomberg combined with a recent shareholder presentation of JP Morgan shows the significant impact that regulations (especially in the derivatives market) has on bank's bottom lines. Upside effects (i.e. revenues achieved through e.g. clearing services) can (a) not offset the revenue decline (JP Morgan estimated 500m USD revenue gain vs. 1-2bn USD revenue impact) and (b) only be achieved by the largest broker dealers. All others – well, welcome to the New Normal… The Bloomberg story: http://www.bloomberg.com/news/2013-03-11/swaps-clearing-d-day-set-to-trim-dealer-profits-credit-markets.html JP Morgans presentation (especially page 27): http://files.shareholder.com/downloads/ONE/2363451209x0x638410/6c89883b-2696-4d66-b84c-10874acfb4de/CIB%20Investor%20Day_FINAL.pdf Tom: https://theotcspace.com/profiles/tom-riesack/


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