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Investment banks face an arid landscape

After a disappointing second quarter, it is even clearer that corporate and investment banking divisions are ill-equipped for their new environment. Radical action is required to address the misfiring economics of the business

After the storm comes the drought. In whichever direction investment banks look (with only a few exceptions), there is little but desert. Escape is going to require superhuman feats of endurance.

Despite something resembling a recovery in the first three months of this year, the second quarter lived down to already low expectations and has left many investment banks stranded with pitiful revenues, enormous cost bases and too much capital off which to make a half-decent return.

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