Banks and brokers are cutting expenses and staff as financial-market upheaval continues under new Basel III rules. Morgan Stanley became the latest example, saying Thursday it will cut about 1,600 jobs, or 2.6% of total head count. The investment house won’t be cutting from its ranks of 17,000-plus financial advisers. Equities businesses shouldn’t feel too much pain either because they have been having a good year. More at risk are likely to be parts of the firm’s fixed-income business that are capital intensive or will be penalized under coming Basel capital rules. This would mean areas like correlation trading, securitization or structured credit.

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