Article at a glance:

The next challenges for global securities firms

• The global securities industry has recently enjoyed good times—but its strong short-term performance may mask underlying vulnerabilities.
• With several traditional sources of profits under pressure, the best firms are anticipating changes in market structure.
• While too many banks continue to chase big M&A deals, more interesting profit opportunities lie in the next tier and in providing new kinds of risk-management advice. In a world dominated by sponsors and hedge funds, market participants should also rethink their strategies for generating ideas from the middle tier of companies.
• In mature financing markets, seamless product-neutral execution will be required, while new skills will be necessary to manage the expected turbulence in noninvestment-grade corporate and consumer credit markets.