Stung by disappointing results, UBS and Credit Suisse Group AG both say they’re focusing their businesses on wealth management rather than trading or making markets.
“The issue around what you call ‘flash crashes’ or ‘gap risk’ is very significantly related to the lack of capital committed by banks to warehousing risk,” said Mark Astley, the CEO of Millennium Global Investments, which oversees about $16 billion. “Banks are just not interested in warehousing risk anymore and obviously bank desks tend to be a lot thinner today.”