Monday's Headlines: Why Investment Banks Will Get Smaller

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Financial institutions will be forced to scale down, merge or sell off their investment banking businesses to avoid becoming obsolete in the wake of Basel III, says the former president of Goldman Sachs International. [WSJ]

After a year of reassessment and retrenchment, many firms appear to have reached an inflection point in their staffing plans and are cautiously planning for new hires. Many say they'll increase their staffing levels from last year or hold them steady over the next 12 months. [Financial News]

High-yield acquisition-related financing has grown to 15.4 percent this year relative to all new issuance, according to JPMorgan Chase. [Bloomberg]

Crispin Odey - the outspoken hedge fund manager - who last year made a 28 percent return on the back of Barclays - now says Lloyds Banking Group is the better investment. [Telegraph]

Spain's Banco Bilbao Vizcaya Argentaria SA is launching an aggressive bid to expand its investment bank in Latin America, Asia and the U.S., capitalizing on the weaker position of some of its rivals. [WSJ]