'The investment banking industry for all intents and purposes has disappeared'.
These are not happy days for big Wall Street financial institutions, and the head of one of them thinks this is effectively the end of an era.
With memories still fresh of all the damage done by too-big-to-fail firms, those Wall Street banks face an endless stream of intensified regulation from the Federal Reserve, Gorman said.
With that Fed oversight comes more strict standards for how much Morgan Stanley can fund its operations with borrowing, which means that its capital-money raised from shareholders or retained earnings-is precious and has to be allocated to where it can find high returns without using too much of it.
This has meant that Morgan Stanley, which before the crisis was in a desperate race to match Goldman's trading prowess, has concentrated more on wealth and asset management, which is less capital intensive and promises more steady profits.
"You choose the businesses where you can get the most efficient return on your capital," Gorman said, referring to Morgan Stanley taking full ownership last year of its then-joint venture with Citigroup, Smith Barney, one of the largest retail brokerages.
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