Bye Bye Investment Bankers

Last of 2 surviving big investment banks in wall street Goldman Sachs and Morgan Stanley converted into regular banks. The change means they will be work and regulated like other banks and can get deposits a/c (saving & checking etc).

For decades, firms like Morgan Stanley and Goldman Sachs thrived by taking bold bets with their own money, often using enormous amounts of debt to increase their profits, with little outside oversight. They were the envy of Wall Street, dominating the industry’s most lucrative businesses, landing headline-grabbing deals and advising companies and governments on mergers, stock offerings and restructurings.

That will make them more financially sound but will also significantly limit their profits. Today, both Goldman Sachs and Morgan Stanley have $1 of capital for every $22 of assets. By contrast, Bank of America’s has less than $11 for every $1 of capital.

NY Times

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