Wall Street a Victim of Its Own Success and Government Regulation (MS)

Senior Editor at CNBC.com, John Carney, is out with a very compelling article this morning entitled, “Why Wall Street Abandoned Partnerships.” Within the piece, the author reminds us that regulation of Wall Street (And the unintended consequences of doing such) is not a new phenomenon. According to Carney, the “Gang of Five,” including Donaldson, Lufkin & Jenrette, Merrill Lynch, Lehman Brothers, Bear Stearns, and Morgan Stanley, were all forced to go public due to the need for a secure capital base. This need arose after “The Paperwork Crisis,” which, via government regulation of stock exchange hours, slammed trading volumes lower, forcing over 160 NYSE member firms to go out of business and many others to scramble for mergers. In effect, “The regulatory response to the Paperwork Crisis had prompted a solvency crisis on Wall Street,” says Carney. To read the full article, please

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