cove3

Winners and Losers in the Bailout Bonanza

I am confused as to leverage/capital regulation which has existed for both investment banks and bank holding companies.

I thought investment banks were exempt and that only the deposit bank and brokerage subsidiaries of bank holding companies were regulated as to leverage.

Yet I saw that a few years ago, Goldman, JP Morgan etc were allowed to increase their leverage, implying some regulation existed.

Also, the argument for Goldman becoming a bank holding company was that it would have access to depositor money. I thought that the deposit bank of a bank holding company could not play games with moving depositors money out to it's investment bank subsidiaries.

Anybody know the answer to this?

Ron

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