A restructuring of the fixed income, currencies and commodities divisions at UBS, Morgan Stanley and Credit Suisse is inevitable, according to JP Morgan analysts, as compensation regulation is leading to a high fixed cost base in a business with volatile revenues.

In a note published yesterday, JP Morgan analysts led by Kian Abouhossein said that compensation regulation had meant that a restructuring of investment banks with a "tier two" fixed income, currencies and commodities franchise was now inevitable.