By this time next week we ought to know how or if this financial bailout is passed through Congress. But the full effect of its sweeping changes won’t be known for some time. It’s possible that whatever gets passed could change Wall Street’s behaviour, but we have our doubts.
Already, banks are doing their best to avoid dealing with the laws and regulation put in place to control how they get their money. Morgan Stanley, for instance, is seeking an exception to the rules that govern bank holding companies, so it can protect its commodities business which pulls in a decent sum of cash for the bank.
Bloomberg: Morgan Stanley, the second-largest bank in commodities trading, will seek U.S. regulatory approval to retain its oil tankers, metals dealing and raw-materials businesses after becoming a commercial bank this week.
The former investment bank is already exempt from the restrictions that apply to its new status for as long as five years, the New York-based company said today in an e-mailed response to questions. Morgan Stanley and rival Goldman Sachs Group Inc. became bank-holding companies Sept. 21 to gain greater access to federal funds.
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