They really have built a very impressive investment-banking capability. They won't always be No.1, but they clearly have been effective in merging their investment and commercial banks. |
To think they're immune would be very imprudent, and I'm sure they'd be the first to agree with me on that. But from everything I can infer, the second quarter is starting out just as strong as the first, and they manage their risk very well. Earnings growth could contract quite a bit if things get bad, but they're well protected from severe loss in most any market environment. |
Trends look very strong for fixed income, with investment grade issuance up strongly and high yield issuance levels performing well. Equity underwriting has been more mixed in the first quarter, but remains very strong, especially in the U.S., and backlogs have been building. |
Unlike in the past, it can't acquire its way out of the growth slowdown. |
Warburg has been taken by surprise by the strength of Morgan Stanley, Merrill and Goldman in M&A underwriting in Europe. |
We've anticipated some of that. There is going to be some uncertainty again surrounding when the equity underwriting calendar's going to look better and all the other businesses. |