

Goldman, Morgan to Become Full-Fledged Banks - agotterer
http://dealbook.blogs.nytimes.com/2008/09/21/goldman-morgan-to-become-bank-holding-companies/?em

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drubio
Interesting in various fronts

* Economic That banks with the 'deal power' of Goldman and Morgan would set themselves up to the scrutiny of the Fed (adopting a commercial bank) is just amazing. These banks made the money they made and had the salaries/bonuses to go with it because they had little regulation with respect to commercial banks.

* Power Jobs / Career Tracks I don't know what the bulk of MBA's will aspire to now -- or Hollywood for the matter. Investment banking was regarded as a golden standard for 'making it'. So no more, now that investment banking has gone down the toilet.

* Regulation / Legislation Ironic, but the Glass-Steagall Act which was enacted in 1933 after the great depression was precisely the OPPOSITE: To separate commercial banking from investment banking! REF: <http://www.fdic.gov/regulations/laws/important/index.html> (So it looks like the cycle has started once again)

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Prrometheus
>* Power Jobs / Career Tracks I don't know what the bulk of MBA's will aspire
to now -- or Hollywood for the matter. Investment banking was regarded as a
golden standard for 'making it'. So no more, now that investment banking has
gone down the toilet.

These companies will still be conducting Investment Banking activities. There
are other bank holding companies who also own investment banks (Citigroup, and
I believe JP Morgan, in addition to a host of foreign banks like UBS). What
this means is that they will be forced to adopt capital requirements and other
regulation in their portfolio business and take on two new regulators in
exchange for more financial stability from deposits and access to Federal
Reserve funds.

>* Regulation / Legislation Ironic, but the Glass-Steagall Act which was
enacted in 1933 after the great depression was precisely the OPPOSITE: To
separate commercial banking from investment banking! REF:
<http://www.fdic.gov/regulations/laws/important/index.html> (So it looks like
the cycle has started once again)

Preventing deposit-taking institutions from taking risky activities is of much
less importance now that there is an FDIC. Also, having diversified business
lines should make these firms less likely to fail. Glass-Steagal made firms
more fragile. You don't see JP Morgan, Citigroup, Wachovia, or B of A getting
bought out, yet.

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nazgulnarsil
the FDIC is a joke.

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nazgulnarsil
downmod all you want, it won't make your bank accounts any safer. does anyone
remember when the FSLIC simply disappeared in the 80's?

"the FDIC’s reserves reported it had US$45.2 billion of reserves covering
1.01% of all deposits. This is considered historically low."

"FDIC Chairman Sheila Blair said yesterday that they may need to borrow money
from the Treasury due to “short-term liquidity issues”"

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known
And Banks in India say No to Stock Markets
<http://in.rediff.com/money/2005/sep/29banks.htm>

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kul
investments banks will come back.

I wonder if they can reverse this status change in a few years.

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veritas
1\. Please don't use 'Breaking' in the headline.

2\. This, from what I know, seems like a terrible move.

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agotterer
Sorry. Guess I got a bit excited. This is pretty important news. The wall
street we knew yesterday may never be the same.

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veritas
I wasn't trying to be an ass :) I just see "Breaking" all over the place these
days on Reddit and I don't want HN going down the same road.

