Today's WSJ explores the extent to which diversification has protected universal banks – with a broad spectrum of business lines and enormous balance sheets – from the upheaval caused by the collapse of the subprime mortgage market and the lack of liquidity in debt markets. The article focuses on the big three: Citigroup, JP Morgan Chase, and BofA.
"These banks rarely hit on all eight cylinders at the
same time, but they can make a pretty good profit on hitting on six out
of the eight," says Robert Maneri, a portfolio manager at KeyCorp's
Victory Capital Management in Cleveland.
They may be withstanding the turmoil relatively unscathed for now, but risk remain:
How the credit crunch can hurt universal banks:
- Debt underwriting slows
- Fewer mortgages to originate
- Servicing defaulted mortgages is costly
- Weaker markets hurt money-management units when investors sit on cash
- Hedge-fund business loses its luster
- Fewer mergers and leveraged buyouts
Read more:
Do-It-All Banks' Big Test
Universal Model So Far Weathers Credit Crunch,Remains Controversial
By ROBIN SIDEL
Wall Street Journal
September 6, 2007; Page C1
During her time at Glenbrook, Erin focused on client engagements in business payments, cross-border transactions, bill payment, and the intersection of corporate finance, banking, and ERP/accounting. She has nearly twenty years of experience leading increasingly complex payment initiatives for corporate clients and advising financial institutions and payment technologists on the development of their payment capabilities.
Erin is also the founder of Forte Financial, a consulting firm focused on corporate finance efficiency, technology, and process improvement. She is a past president of the Financial Women’s Association of San Francisco and also a two-term past president of the San Francisco Treasury Management Association. Erin is no longer with Glenbrook, but contributed greatly during her time at the firm.