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Investment Banking

Wirecard’s sea of buy ratings highlights analysts’ balancing act

Negative stock calls can draw ire from investor relations, company executives and even investor clients

Thursday, 9 July 2020 at 07:33

Wirecard’s sea of buy ratings highlights analysts’ balancing act
Photo: Reuters

Bank analysts have been left red-faced in the wake of the collapse of Wirecard — one of the biggest frauds in European history — for continuing to issue favourable calls on the company even as the sea of bad news swelled around the fintech firm. 

But any lessons learned from the scandal may be hard won. Banks rely not just on paid subscriptions to their written research, but also act as middlemen between investor clients and powerful companies.