What's the major difference now that Morgan Stanley and Goldman Sachs are now bank holding companies?
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989 points
rvilmur answered one year ago …
They can now raise money by buying other banks and taking in deposits into their own newly formed banks. Depending on how much toxic paper they have in inventory, this may save them. Until these financial companies are completely honest about the extent of their toxic paper, you can not calculate the probability of survival under different circumstances.
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251 points
MichaelShulman answered one year ago …
The new classification helps insure the companies' long-term viability, but it also means it will make it incredibly difficult -- if not impossible -- for the banks to maintain their outrageous profitability.
The move means these banks are subject to current and future regulations governing traditional banks, so essentially they have traded profit for protection.
