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McKinsey Says Investment Banks Should Merge FICC, Stocks

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The world’s largest investment banks should enact changes including “ruthless prioritization” of clients and combining fixed-income and equity trading to avoid a sharp decline in profitability, according to McKinsey & Co.

The companies should cut the number of products they offer and push many clients to electronic platforms, New York-based McKinsey said in an annual review of the investment banking and trading industry released today. The firms must also understand which clients are most profitable and restrict use of balance sheet to those customers, according to the report.