Wall Street's New Geography

Days after Lehman's bankruptcy and Merrill's shotgun marriage to BofA, the last two bulge brackets become banks. It's a move that will dramatically alter the financial-services landscape.

September 29, 2008

Last Monday, just as Barclays began its integration of Lehman Brothers employees, the geography of Wall Street was once again changed dramatically. Goldman Sachs and Morgan Stanley, the last independent US bulge-bracket banking firms left standing after a year of credit tumult, were given Federal Reserve approval to form bank holding companies. A day later, Warren Buffett announced a multi-billion dollar investment in Goldman Sachs. And amid all of this, the Fed changed its policy on equity investments, allowing hedge funds and private equity firms to increase their stakes in banks.

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