This morning the world is surprised by the news that the last two surviving investment banks Goldman Sachs and Morgan Stanley have applied the US Federal Reserve Board to have their status changed into a bank which can take deposits. By this move it marks the end of an era of investment banking industry in the US.
As "normal" banks Goldman Sachs and Morgan Stanley can open branches and take deposits in order to bolster their financial position. From now on they are subject to regulation by the Fed. It ends the division between investment and regular banking in the US.
Earlier this year investment bank Bearn Sterns collapsed in the wake of the financial turmoils and was sold to JP Morgan, a week ago Lehman Brothers filed bankruptcy protection while Merrill Lynch was sold to Bank Of America. What is left now are only a few small boutique securities firms.
In less than a year since the mortgage crisis hit the global financial markets, gone are the giants that once dominated the investment banking industry...
Yee Chuen Leung
Chief Editor
No comments:
Post a Comment