Article at a glance:

The right fix for fixed income

• The US fixed-income market has been Wall Street's primary growth engine of late—but participants face an uncertain future.
• Consumer debt, fueled by increasingly risky mortgage lending, has reached record highs, and standards have tumbled at the low-grade end of the corporate credit market.
• The most negative scenarios suggest that the top firms' profits will probably fall by at least 20 percent.
• These firms should therefore ensure that they have robust modeling skills to alert them to systemic change, as well as integrated risk budgeting, harmonized systems and processes, and credit workout and owned-asset capabilities.