Morgan Stanley and Goldman Sachs are now bank holding companies |
News - Hugh's Views | |||
Written by Hugh McManus | |||
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It's Sunday, so there's more news from Wall Street! I guess they're not victims in the sense that AIG, Fannie/Freddie and Merrill were, but Morgan Stanley and Goldman Sachs today underwent a remarkable transformation. The Wall Street Journal reported that the two venerable investment banks will become bank holding companies. The two entities will now fall under the purview of national bank regulators; capital requirements will change (increase!) and consequently, profits are likely to decline. Wall Street, as it has existed for scores of years, is no more. The signal here is that the industry was likely in a much worse condition than had been suspected. I wonder what will happen next Sunday. This move alone would have been quite stunning had it occurred four weeks ago; however, today, it just seems like one more chapter in the unfolding saga of the housing mess.
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