The global securities markets are in the midst of profound
cyclical and structural change. This joint Morgan Stanley-
Oliver Wyman research project seeks to explore the outlook
and implications for the leading capital market banks, although
includes wider implications for a variety of financials. While the
industry conclusions are largely joint, any stock-specific or
valuation sections solely reflect the views of Morgan Stanley
Research, not Oliver Wyman. We would like to express our
thanks to the business leaders who shared their views and
feedback on our forecasts.

The current crisis in 2008
Investment banking and capital markets competitors look
set to experience the worst hit to earnings in twenty years.
• We estimate that already nearly six quarters of industry
earnings will have been wiped out, largely by MTM losses,
in the first three quarters of the downturn to Easter 2008.
This already starts to rival the 1989/90 downturn, which
was the most severe of the five crises in the last 20 years,
wiping out six-and-a-half quarters of industry earnings. It
also looks more severe than the Dot Com or 94/95 Mexican
crises (see Exhibit 1 and 7).

• A number of the industry leaders we’ve interviewed share
our sense of some parallels to the 1989 crisis: after a long
period of rising leverage, a sharp deterioration in credit
(then LBOs, now US mortgages), the liquidity crisis that put
Drexel out of business, as well as broader bank funding and
credit issues (the S&L crisis). As in 1989-92, today banks’
credit spreads trade outside the equivalently rated
industrials, leading to further credit contraction and
substantial yield curve steepening and fiscal response was
needed.

[此贴子已经被作者于2008-8-16 17:56:28编辑过]