Investment bank Morgan Stanley suffered losses on seven trading days in the third quarter. A regulatory filing showed that the bank's traders were able to generate over USD 100 million on one day. This represented a reduction from the nine days in the third quarter last year. However, the bank said the daily losses did not go over the bank's value-at-risk.
Among the five largest banks on Wall Street, Bloomberg reported that Morgan Stanley had the highest equity trading revenue. However, it also generated the least revenue in terms of fixed income trading. Morgan Stanley had already attained its 2014 goal of capital reduction for its fixed income unit. The move was part of the bank's Chief Executive Officer James Gorman's efforts to double its return on equity.
Last month, Chief Financial Officer Ruth Porat said the reductions would enable Morgan Stanley to achieve its return on equity goals as far as trading for fixed income goes even if the revenue would fall under USD 6 billion.
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