End of Investment Banking?  

Posted by NoeL in , , , , ,

This is THE BIG question that is being asked by many all over the world, today! Yes or No? With the latest developments with the last standing BIG 2, Morgan Stanley and Goldman Sachs Group Inc., we are forced to believe so!!

On Sunday, Sept. 22, 2008, the standalone investment bank died quietly, after a brief but dramatic illness. It was 75 years old. Hope you all know which one I am referring to here!!

On Sunday night, Goldman Sachs and Morgan Stanley said they would become bank holding companies, submitting to the authority and oversight of federal banking regulators. After the collapse of Bear Stearns, the bankruptcy filing of Lehman Brothers and the agreement by Merrill Lynch to be acquired by Bank of America, Goldman and Morgan were the last remaining investment banks. Goldman noted that the move would make it the fourth biggest bank holding company in the U.S. Morgan said it was seeking “maximum flexibility and stability to pursue new business opportunities as the financial marketplace undergoes rapid and profound changes.”

Christine Harper and Craig Torres at www.bloomberg.com says “The Wall Street that shaped the financial world for two decades ended last night, when Goldman Sachs Group Inc. andMorgan Stanley concluded there is no future in remaining investment banks now that investors have determined the model is broken.”

For more reading:-

  1. Bloomberg.com - Goldman, Morgan Stanley Bring Down Curtain on an Era
  2. Business Week - And Then There Were None
  3. CNNMoney.com - Goldman, Morgan Stanley To Convert To New Model
  4. MoneyControl.com - Fed bailout of Goldman, MS: End of I-Bank Era


I always wanted to be an investment banker. The very reason why I wanted to do my MBA was for this! Now what? What should be my long term and short term goals? I will have to readjust myself before the BIG interviews!!

Cheers
NoeL

This entry was posted on Monday, September 22, 2008 at Monday, September 22, 2008 and is filed under , , , , , . You can follow any responses to this entry through the comments feed .

3 comments

1. Wall Street as we knew it doesn't exist anymore..
2. Since they will be regulated like normal banks, the mega profits earned will be unlikely in the future..
3.Could you put that tick box for the 'subscribe to comments by email'......

September 24, 2008 at 3:01 AM

about no.3, forget it, there is a link after we comment.

September 24, 2008 at 3:02 AM

@Charlie...
I totally agree with you!

Just another thought!! USSR, once mighty nation, went down the drain not because it was conquered or defeated by someone... But because its financial system collapsed!!

Don't you feel US is on a similar route? The power and might of US, Wall Street, is no more!!

Regarding the 'subscribe to comments', you can click on 'Follow me' on the side bar, apart from what you did just now! :)

September 24, 2008 at 8:02 AM

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I study at European Business School, Oestrich-Winkel. The opinions expressed here are my own, and neither European Business School, Oestrich-Winkel nor any other party necessarily agrees with them.