BlackRock vs. Wall Street: It's on!

A big story as of late is the lack of competition in trading, which has created huge opportunities for the broker-dealers that remain active in the market, such as Goldman Sachs and JPMorgan. The huge spreads we're seeing have powered profits at several firms, leading to several upside surprises.

The loser in all this: Buy-side firms that rely on the traditional broker-dealers for trades. BlackRock has come out swinging. He told the Financial Times: "There are fewer players. There is very little capital being committed by these dealers. They're just taking the spread between the bid and the ask and they are making very luxurious returns." Of course, many buy-side firms have invested heavily over recent years to get their trading costs razor thin, relying more on dark pools and the like. But we seem to be in a whole new era of high volume and reduced competition.

For more:
- here's the article

Related Articles:
What will Bank of America do with BlackRock?
BlackRock Solutions' big success stokes worry
Big conflicts of interest for PIMCO, BlackRock?
BlackRock's role in the crisis
BlackRock affected by crisis?

Post a comment