At the beginning of 2008, five investment banks towered over Wall Street. As of Sunday the last two titans left the building. Goldman Sachs and Morgan Stanley asked the Federal Reserve for permission to become bank holding companies. The Fed said yes. The next day Morgan Stanley entered into a nonbinding letter of intent to sell 20 percent of itself to Mitsubishi UFG Financial Group. “There is a new world order,” says Sean O’Dowd, senior analyst at Financial Insights. “Whether this is the best structure for these companies is yet to be seen. It diminishes risk and exposure, but you might be limiting inventiveness, too.”

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