Morgan Stanley says investment banks can be profitable in 2009

Despite high provisioning levels around merchant banking and legacy assets, a recent report by Morgan Stanley argues that most investment banking divisions should be able to operate 'in the black' this year.

A Morgan Stanley report titled 'Outlook for Global Wholesale and Investment Banking' published in March this year predicts that constructive markets could haul the investment banking divisions IBDs of major banks into the black in 2009, despite the analysts' belief that merchant banking and legacy assets will require further and extensive provisioning measures.  

IBD is defined by the report as comprising equity proprietary business, equity derivatives, cash equitiesprime brokerage FICC fixed income, commodities and currencies...

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