Two major investment banks, Lehman Brothers and Goldman Sachs, reported first-quarter earnings last week. While the two banks may have beaten analysts' estimates for the period's performance, both acknowledged significant RMBS losses and credited client activity with buoying their fortunes.

Lehman Brothers reported net revenues of $262 million for its fixed-income capital markets segment, a drop of 88%, caused by deterioration in the market for residential mortgages, commercial mortgages and acquisition finance. During the same period last year, the bank cleared $2.2 billion in net revenues, according to the statement about its first-quarter results.

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