(1888PressRelease)
September 07, 2007 - Investment banks Bear Stearns and Lehman Brothers are expected to have been hardest hit by the credit crunch, it has been reported.
According to Bernstein Research, Bear is the most vulnerable of all as it has reduced exposure to less-troubled non-US markets and 44 per cent of its revenue is garnered from fixed-income business.
While Lehman Brothers generated 48 per cent of its revenue from fixed income business in 2006, it has greater exposure to the European and Asian markets, and this is expected to reduce the impact of the credit crunch on the bank.
However, the Financial Times has still predicted a sharp fall in quarterly profits for all investment banks when results are announced in the week starting September 17th.
The most well-placed investment banks appear to be Goldman and Morgan Stanley, though, due to their high exposure to currencies and commodities.
Meanwhile, all banks have been boosted by the fact that client trading has remained strong despite market volatility.
Further insight into the area could be provided by Aranca, which specialises in the provision of end-to-end, on-demand, custom investment, business and economic research.
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