All houseguests are said to bring plea-sure: some when they arrive, others when they leave. The same could be said of banking bosses and the strategies they champion. The surprise ousting on June 6th of Deutsche Bank's embattled co-bosses, Anshu Jain and Juergen Fitschen (who will leave the bank this month and in May 2016 respectively), caused its share price to jump by 8%. Meanwhile, a new strategy at HSBC, hemming in its investment bank and expanding in Asia, was greeted by investors with the enthusiasm usually reserved for visiting in-laws (shares dropped by 1%). The travails of Deutsche and HSBC are distinct but related: international jack-of-all-trade banks are out of fashion. The cost of running them has spiralled. Regulators who fret they will one day have to bail out these horribly complex global institutions demand that banks finance themselves with more equity (cash from shareholders) rather than cheaper funds borrowed from depositors or in money markets. Compliance costs have ballooned, alongside multi-billion-dollar fines for fiddling currency markets and interest rates or facilitating money-laundering and tax-dodging, among many other trespasses.
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