Breakingviews - Wall Street’s banking-as-a-service has a problem

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Private equity’s rising share of M&A should be great for banks. But as debt markets groan and equity markets stop up, it could be one more subscription business hurt by the downturn: JMAGuilford

this week, Reuters reported. A bunch of other debt packages are stuck on banks’ balance sheets — and until they’re cleared, banks’ ability to write further big checks is constrained.

Economic uncertainty makes people – and investors – become more discerning about how they spend their cash. Subscriptions, whether it is Netflix or to a favored investment banker, only makes sense when customers are flush. For Goldman and its brethren, life may be about to get harder as belts tighten.Private equity firms accounted for 26% of M&A deals in the first six months of 2022, according to Refinitiv, a record-high share.

During that time, investment banks earned $6.5 billion in fees worldwide from providing services to financial sponsors, Refinitiv data show.Editing by Lauren Silva Laughlin and Sharon Lam

 

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Finance Finance Latest News, Finance Finance Headlines