ABSTRACT
The disappearance of independent investment banks from the American corporate landscape stands as one of the most remarkable developments of the current global financial crisis. 1 Over the course of a few months in 2008, the ‘big five’ investment banks, some of them more than a century old, were brought to their knees by the collapse of the subprime mortgage market. Bear Stearns and Merrill Lynch were swallowed up by commercial banks in government-orchestrated takeovers. Lehman Brothers was allowed to perish, while the two survivors Goldman Sachs and Morgan Stanley were forced to convert themselves into bank holding companies in order to secure emergency funding from the Federal Reserve that would save them from the fate of their counterparts.
