This is supposed to be the year of the big balance sheet: the year when leadership in wholesale financial and capital markets business passes from the pure-bred US investment banks to a mix of US and European hybrid, universal banks. The universal banks can supposedly offer not just all the investment-banking services, but also the commercial lending, foreign exchange, custody and cash management services that clients need.
Throughout the past 10 years the investment banks operated in a league ahead of the large commercial banks. Now they're being trampled underfoot, and may be especially vulnerable in the new climate. The only way that the pure investment banks - Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley - could possibly survive, the argument runs, is by joining forces with commercial banks.
Yet maybe the argument has been overstated in what has been a rotten year for the financial services industry. Banks, after all, have had to face up to falling equity and M&A volumes, general economic gloom, worries about job losses and now, far worse than any of these, the destruction of much of lower Manhattan in a murderous terrorist attack that has left many financial services firms struggling to function in back-up offices while survivors mourn lost colleagues.