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Death of Wall Street, Rise of Main Street

Morgan Stanley

The beginnings of another new economy are taking shape as Morgan Stanley and Goldman Sachs prepare to close the curtain on investment banking.

Mitsubishi UFJ Financial Group Inc., Japan’s largest bank, will inject 900 billion yen ($8.4 billion) into Morgan Stanley to help it transition to a bank holding company. Goldman Sach’s strategy is slightly different albeit with the same ultimate objective i.e. to become a commercial bank. According to Bloomberg, Goldman already has in excess of $20 billion in customer deposits in two subsidiaries and is creating a new one, GS Bank USA, that will have more than $150 billion of assets, making it one of the 10 largest banks in the U.S.

Is the SEC out of a job?

The Securities and Exchange Commission will have not much to do henceforth save regulate some of the boutique investment banks that have largely advisory businesses.

“The decision marks the end of Wall Street as we have known it,” said William Isaac, a former chairman of the Federal Deposit Insurance Corp. “It’s too bad.”

Will the transition help or hurt a sustainable economy?

Many champion the transition on the basis that a stronger Main Street holds promise of a more stable, sustainable economy as compared to the risky endeavors of Wall Street. But is this what is needed to doctor an economy on the verge of depression?

The move is also likely to result in lower compensation for the ex-investment banking employees. A decrease in investment banking salaries which have historically enabled further employment in U.S. households are likely to have a negative impact on household employment and economics. It will be interesting to watch how the results of the shakeup unfold as an exercise in sustainable economics.

Related Posts:

To Bailout or Not to Bailout: Is Free Market Economics Sustainable?
Lehman Brothers Collapse: New Economic Architecture Required
Financial Crisis: What Will The Collapse of Investment Banking Mean for CSR?

Photo credit: Google

Written by Reenita Malhotra

Reenita Malhotra Hora is an Ayurveda clinician, entrepreneur, writer and mom. Her experience has ranged from running Ayoma, an Ayurveda business to running a natural health practice at San Francisco's California Pacific Medical Center.

Reenita is a published author of two books books about health and wellness: ‘Ayurveda - the Natural Medicine of India’ and
‘Inner Beauty’. She is also the Editor for Green Options Media's business blogs and a freelance writer for a variety of print and web publications.

In quieter moments, she likes to spend her time hiking, swimming the warm seas, cooking with the family or writing fantasy fiction adventure stories for kids from from 2 to 92.

Check out her wisdom at


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