The dramatic events troubling Wall Street this week may have further damaged the industry's fragile confidence in the global financial system, but commentators believe this crisis could ultimately be positive for the re-structuring and long-term profitability of the banking sector.
Martin Kinsler, manager of the Henderson Horizon Global Financials fund, believes the coincidence of seeing both the demise of Lehman Brothers and the sale of Merrill Lynch on the same weekend will ensure this month is recognised as a significant moment in the history of financial markets. However, he holds the view that the lack of US Federal Reserve fiscal support for the former is a necessary acid test for the resilience of the capitalist model, and that the rapid reduction of capacity seen in investment banking will ultimately aid in how it is re-structured. He commented: "AIG, one o...
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