Wall Street’s Biggest Banks Face a Harsh Reality Check in China
Plans to compete for a larger share of the No. 2 economy’s $60 trillion financial market face challenges from a souring business climate.
The stakes are high for the global investment banks in a market long viewed as the final frontier for big fees on everything from mergers to stocks sales and trading.
Photographer: Qilai Shen/BloombergMore than three years after China’s grand financial opening, it’s becoming clear to Wall Street giants that their dreams of windfall profits from the $60 trillion market are more elusive than ever.
Goldman Sachs Group Inc. and Morgan Stanley are among banks scaling back ambitious expansion plans and profit goals as a deteriorating geopolitical climate and President Xi Jinping’s willingness to sacrifice economic priorities for security concerns rock the private sector and throttle dealmaking. More drastic jobs cuts are being eyed at the biggest banks, according to senior executives who asked not to be identified discussing private matters.