BANKS are yet again in trouble—not pure investment banks such as Lehman Brothers, or mortgage specialists such as Northern Rock; but a handful of huge global “network” banks. These lumbering giants are the woolly mammoths of finance, and if they cannot improve their performance they deserve a similarly grievous fate.
The pressure is intense. Last month JPMorgan Chase felt obliged to tell investors why it should not be broken up. Citigroup awaits the results of its annual exam from the Federal Reserve: if it fails, as it did last year, its managers will be for the chop. Deutsche Bank is rethinking its strategy, after years of feeble performance and drift. HSBC, the world’s local bank, has been hammered for both a tax scandal in its Swiss operation and because of its poor profits.
Read the full Economist editorial here.