In its recent investment in Facebook, Goldman Sachs demonstrated noteworthy innovation and dynamism demanded by the new economic environment. When markets stabilized as the financial crisis subsided, like other financial firms, Goldman found that opportunities to make above-market returns vanished. Moreover, competitive pressures intensified, higher capital requirements and fee regulation threatened to diminish future earnings [...]
In American cinema, media, and popular opinion, the job of an investment banker has always been viewed as incomparably more glamorous than that of a commercial banker. Investment banks were portrayed to be on the forefront of innovation, complexity, and risk-taking. Commercial banks, on the other hand, projected a much more subdued and routine-driven image. The GS and MS conversions into bank holding companies shed new light on the long-standing debate.