NEW YORK (Reuters) - The pandemic-era trading boom has started to slow down for Wall Street banks, reviving pressure on icons like Goldman Sachs and Morgan Stanley to reinvent those businesses. The COVID-19 pandemic transformed banks’ trading desks, which had struggled with lethargic revenue growth in the years since the 2007-09 financial crisis as tougher regulations and technological advancements crimped margins. From being the laggard in most investment banks, traders took center stage last year, generating bumper revenue and profits as clients scrambled to reposition their portfolios in highly volatile markets. A massive injection of cash into capital markets by the Federal Reserve led to unprecedented liquidity and trading activity as investors sought opportunities to cash in. But with activity returning to more-normal levels, discussion is returning to how trading businesses will evolve and the strategies adopted by banks most reliant upon them. “At some point the Fed is going to stop and when it does you’re going to go back to the core issue of how to make money in this business,” said Dick Bove, a longtime bank analyst with Odeon Capital Group. “There has to be a restructuring of trading businesses because I don’t think in their current form they offer attractive growth going forward.” The biggest U.S. banks reported a slump in revenue from fixed income, currencies and commodities (FICC) trading in the second quarter, facing tough comparisons in the same period last year, when the COVID-19 pandemic first hit, sending markets into a frenzy. Equities trading held up better, with three of the five U.S. investment banks seeing higher revenue. Despite that, executives remain unsure about what the “new normal” will be for trading activity and when the market will settle at that level. “We are all trying to figure that out,” Morgan Stanley Chief Financial Officer Sharon Yeshaya said in an interview. Although overall trading revenue dropped by around a third from this time last year, it remains well above pre-pandemic levels for the largest Wall Street banks. “We’re not going back to 2019 levels anytime soon,” said Goldman Sachs Chief Executive Officer David Solomon in an interview with CNBC. Executives at Goldman Sachs and Morgan Stanley point to a larger overall market and an increase in their market share as European rivals retreat and they to more trading on behalf of corporate clients. “The (FICC) wallet feels bigger than it was pre-pandemic,” said Morgan Stanley’s Yeshaya. “We are capturing a bigger share than we had before.” However, some analysts are skeptical. “I would be cautious to say the size of that market has increased,” said Mark Doctoroff, MUFG’s global co-head of financial institutions group. Goldman Sachs and Morgan Stanley - the banks that are most reliant on capital markets - will face challenges as market activity returns to more normal levels, analysts say. Those banks have benefited more than others as the trading and investment banking boom of the past year drove their earnings growth and gave a sharp boost to their share prices. Morgan Stanley shares now trade at more than three times their value at the start of the pandemic. Goldman Sachs’ shares are worth nearly three times what they were when COVID-19 hit.