America’s big banks are in rude health—with one exception

From one perspective, it seems like a torrid time to be a banker. A handful of financial institutions failed in the first quarter of the year after their depositors fled, spooked by the impact of higher interest rates. After these failures, smaller banks struggled to keep hold of deposits, pushing up their interest costs. At the same time, is cooling, owing to higher rates, raising the prospect of job losses and defaults. Higher rates have almost entirely shut down activity in capital markets, too. The climbing cost of debt has put off would-be acquirers in the business world, prompted firms to delay issuing bonds and encouraged startups to postpone initial public offerings.The misery is particularly obvious at the most famous of all Wall Street institutions: Goldman Sachs. The firm is also the most exposed to ups and downs in dealmaking and most reliant on trading revenues, meaning it has struggled over the past year or so. Goldman hit another low on July 19th, when it reported its worst quarterly profits in three years. Cyclical woes have been compounded by an ill-fated push into consumer lending, which now looks like a serious error. In the second quarter the firm wrote off $500m of its investment in GreenSky, an online lender acquired by David Solomon, Goldman’s boss, in 2021. The poor results will only add to the pressure Mr Solomon is under.