FIG funding squeeze set to reshape lending
Banks will step away from corporate lending and international expansion, due to rising costs in the unsecured funding market and regulation that will make them more competitive in their home markets, analysts at Morgan Stanley and Oliver Wyman said in a report published this week.
The analysts believe the market has underestimated the degree to which banks will rethink the businesses they are involved in over the next 12-24 months in particular reshaping their strategy in lending.
"Much higher fixed costs and more trapped capital means banks cannot simply shrink at the margin
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