Weekend Economists Mark D Day, 2014 June 6-8, 2014

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19. Morgan Stanley Said to Cut Rates Traders Amid Slump

http://www.bloomberg.com/news/2014-06-06/morgan-stanley-is-said-to-cut-london-fixed-income-traders.html

Morgan Stanley (MS) eliminated fixed-income trading jobs in London, New York and Toronto this week because of tough market conditions, people with knowledge of the plan said.

The dismissals focused on traders in foreign exchange and interest rates, the people said, asking not to be identified as the details are private. The cuts were made starting June 3, two of the people said. Hugh Fraser, a spokesman for Morgan Stanley in London, declined to comment.

The biggest trading banks have warned investors about a slump in fixed-income trading activity this quarter amid low volatility. That threatens Morgan Stanley’s quest to boost the return on equity of its fixed-income business to 10 percent.

The cuts included closing the interest-rates trading desk in Toronto, according to three of the people. The desk consisted of four employees, said one of the people. The Toronto desk was started in 2012, when the rates business was run by Glenn Hadden, a Canadian who left the bank earlier this year.