Investment banks increasingly leaning on European, Asian growth to boost earnings
Facing a U.S. economy that is expected to grow at a moderating pace in 2007, Wall Street's biggest investment houses are aggressively turning overseas in hopes of sustaining record profits reached during the past year. Economic and business growth surged in Europe and Asia in 2006, and that trend is projected to continue this year. Stock markets from Paris to Hong Kong have outpaced the gains produced on U.S. exchanges, and foreign companies are increasingly using acquisitions to grow.
This has motivated the major New York-based investment banks to expand their operations in global financial centers including London, Frankfurt, Sydney and Hong Kong. Without plans to increase their business outside the U.S. — either through organic growth or acquisitions — executives said their companies would fall desperately behind.
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