Awkward!

Banks profited from volatile stock and bond trading as the pandemic roiled the markets

- By Sridhar Natarajan and Michelle F. Davis

A bunch of Wall Street executives got together for dinner a decade ago while the U.S. economy was in tatters. Their industry, fresh offa bailout, was printing big profits again— and Americans were seething. Congress wanted hearings.

As the executives picked at their food, one from Goldman Sachs Group Inc. turned to his peer from Morgan Stanley, which had been slower to bounce back from the crisis, and said: “You have no idea how damn lucky you are to lose money with a hopeless business model.” The table erupted in laughter. The kernel of truth in the quip is that nobody likes bankers profiting as the world burns. It draws a harsh spotlight.

Over the past week, Wall Street’s five biggest investment banks disclosed $45 billion in revenue from trading and dealmaking units, marking those businesses’ best quarter in modern history. The catalyst: a deadly global pandemic and the Federal Reserve’s unprecedented measures to prop up the economy.