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Equities feel the heat 

June 13, 2014
By Christopher Whittall
 
As regulatory headwinds and rock bottom interest rates continue to erode banks’ fixed income revenues, major dealers are turning their attention to the impact of financial reforms on the one bright spot in their markets’ businesses of late: equities sales and trading.
 
Analysts originally predicted bond desks would bear the brunt of the pain associated with implementing Basel III, Dodd-Frank and EMIR, as fixed income was shoehorned into a more equity-like trading model.
 
But these regulations – particularly plans to impose a cap on overall bank leverage – are also forcing dealers to cut back core equity activities such as prime brokerage and delta one trading in order to meet return hurdles in the new environment.
 
Read More: IFR
 
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