Propping up the profits

With commissions waning and market activity light, banks are increasingly turning to propriety desks to boost their profits. But is this extra risk-taking a cause for concern, asks Joanne Hart

Key points • Banks are using prop desks to boost profits
• While prop desks still trade more equities than credit, the balance is gradually shifting
• The move concerns some clients who remember the losses incurred by banks’ prop desks in the wake of the 1998 Russian default

It is very understandable. Markets have been difficult, clients are getting more demanding and the