Dr Peter Hahn, the Henry Grunfeld Professor of Banking, has appeared on The Today Programme to speak about the challenges facing the investment banking industry.
With global investment bank Deutsche Bank hitting the headlines, Henry Grunfeld Professor of Banking, Dr Peter Hahn, spoke with Justin Webb and Nick Robinson about some of the challenges the investment banking industry is facing.
In a wide-ranging interview, Peter discussed the link between risk and remuneration, how the model of investment banking needs to become more flexible and reduce its fixed costs and the differences between EU and US investment banks.
Commenting, Peter said:
“The model changed a lot; investment banking should be a business that is capital light…what’s happened is that over the last 20 years, banks have expanded that business so much. They have to address their fixed costs as fast as they can.
“The US home market has done much better than Europe; for European investment banks they expanded too much and often in the wrong products and were over reliant on fixed income-related businesses.”
To listen to the interview in full, please use this link and scroll to the 20 minute mark.