Goldman Sachs on the Outlook for Capital Markets

The video discusses the current state of capital markets, highlighting a decline in investment banking activities compared to previous years. It anticipates a potential recovery in M&A and ECM activities next year, contingent on market volatility and corporate confidence. The trading sector has been a bright spot, despite deteriorating conditions in the treasury market due to increased capital requirements and economic uncertainty. The video also addresses the impact of regulatory constraints on market liquidity and the need for balanced capital ratios to support financial market operations.

What is the expected percentage decline in ECM revenue this year?

• 10 to 15%

• 30 to 35%

• 70 to 75%

• 40 to 50%

What is necessary for a potential recovery in M&A and ECM activities next year?

• Lower capital requirements

• Higher interest rates

• Normal market volatility and corporate confidence

• Increased government regulations

How do current capital market revenues compare to those in 2019?

• They are down by 15 to 20%

• They are down by 30 to 35%

• They are up by 15 to 20%

• They are the same as 2019

What has been a significant factor in the deterioration of market liquidity this year?

• Lower interest rates

• Higher inflation rates

• Increased capital requirements for large institutions

• Decreased trading volumes

What is one of the challenges faced by large financial institutions in acting as market makers?

• Technological limitations

• Lack of skilled personnel

• High operational costs

• Balance sheet constraints