Bank Traders Save Profits and Maybe Themselves In New Crisis
- Traders have been targeted by cost cuts and rules to cut risks
- Now their desks are helping to offset steep losses from loans
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The last time U.S. banks encountered a crisis of this magnitude, huge trading losses added to the burden of rapidly souring loans. This time around, the traders delivered much needed relief.
Wall Street trading desks -- long the target of cost-cutting and regulations aimed at reining in risks at banks -- notched their best quarter in eight years as clients rushed to change or hedge positions in the most volatile period on record. That helped the industry’s largest firms remain profitable even as they set aside more for bad loans in the first quarter than they did in all of 2019.