A sustained slump in trading is threatening to wreck the nascent recovery at investment banks this year after many markets have failed to bounce back from the traditional summer slowdown. Revenues from sales and trading – which represent about three quarters of investment banks’ business – are forecast by analysts to fall by around 35% in the third quarter.

While there are optimistic signs of a recovery in volumes in some markets such as OTC derivatives and mortgage-backed securities, and the head of one US investment bank in Europe said he had seen a recovery to "broadly normal" conditions in September, most markets and analysts remain depressed.