Jana Technology Services Blog

September 13, 2007

Investment Banking feels the Pain

Billions of dollars of ‘sub-prime’ loans to homebuyers with poor credit records have been lost to defaults in the US.  This has had a huge knock-on effect in the UK, especially on Credit Derivatives, which have hit the wall due to the fact that they didn’t escalate their risk position.  This ultimately leads to lower revenues for the banks.

What does this mean for software vendors who sell in the Financial Services industry ?  Short term pain I’m afraid.  Projects have been postphoned and in some cases cancelled, and there is an expectation that consultants and developers on contracts will be released onto the market at the end of the year when their contracts expire.

It’s not all doom and gloom, vendors who have products that cater into Commodities, FX. Equities, and Prime Service (Extended Services to Hedge Funds) may still be able to prosper, but in general it could take up to 9-12 months for the market to settle again.

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1 Comment »

  1. […] janats wrote an interesting post today onHere’s a quick excerpt Billions of dollars of ’sub-prime’ loans to homebuyers with poor credit records have been lost to defaults in the US.  This has had a huge knock-on effect in the UK, especially on Credit Derivatives, which have hit the wall due to the fact that they didn’t escalate their risk position.  This ultimately leads to lower revenues for the banks. What does this mean for software vendors who sell in the Financial Services industry ?  Short term pain I’m afraid.  Projects have been postphoned and in some cases cancelled, and there is an expectation that consultants and developers on contracts will be released onto the market at the end of the year when their contracts expire. It’s not all doom and gloom, vendors who have products that cater into Commodities, FX. Equities, and Prime Service (Extended Services to Hedge Funds) may still be able to prosper, but in general it could take up […] […]

    Pingback by Credit Starter Guide » Investment Banking feels the Pain — September 24, 2007 @ 8:48 pm | Reply


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