Prime brokerage threatening banks

A head of prime brokerage at a major bank in London said: "The rates some banks are charging – around £2–£3 per million – are not nearly enough to recoup costs. We charge closer to £8–£10 and we regard this as a fairly tight margin. The fact that other banks are charging way below what is economic is making it difficult for everyone."

Justyn Trenner, chief executive of research and advisory firm ClientKnowledge, concurred that there is a danger prime brokerage could be value-destroying. He said:

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