Moody's Expects to See Growth in Investment Banks in 2019

The transcript discusses the outlook for global investment banks, highlighting restructuring efforts and profitability improvements. It examines the challenges faced by European banks, including potential consolidation and talent retention issues. The discussion also covers American banks, focusing on JP Morgan's strong performance and the impact of economic cycles on banking profitability.

What underpins the positive outlook for global investment banks despite challenges in Europe?

• Strong capital liquidity and improved profitability

• Increased interest rates by the ECB

• Decline in US economic growth

• Reduction in global diversification

How do global banks benefit from US economic growth?

• By increasing their litigation costs

• By focusing solely on European operations

• Through their significant US operations

• By reducing their global diversification

What is a major challenge for Deutsche Bank in the context of a potential merger with Commerzbank?

• High domestic profitability

• Strong structural issues in German banking

• Excessive US operations

• Lack of global diversification

What factor makes it difficult for European banks to retain talent?

• Lack of young professionals

• High share prices

• Strong profitability

• Bank disarray and restructuring

Which American bank was recently upgraded due to its strong balance sheet and profitability?

• Citigroup

• JP Morgan

• Morgan Stanley

• Goldman Sachs

What is a potential impact of a flat yield curve on banks?

• Challenges in making money

• Improved deposit quality

• Higher interest rates

• Increased profitability

What distinguishes JP Morgan in the banking universe?

• High litigation costs

• Lack of global operations

• Rarefied rating and strong profitability

• Low asset quality