Morgan Stanley this week cut staff covering short-term credit and regional broker-dealers, after a quarter in which the bank posted a 42 percent drop in bond trading, several sources told Reuters.
The sources blamed the shakeup at the No. 6 U.S. bank by assets on tougher capital rules, mounting competition from faster and cheaper trading on electronic systems and expectations that the Federal Reserve will raise U.S. interest rates next week for the first time in nearly a decade.
The decision to downsize followed one of Morgan Stanley’s slowest quarters for bond trading since the global credit crunch.
The bank has been focused on improving profitability within fixed income and has been scaling back businesses that miss those metrics, the sources said.