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Opinion

Investment banking: Generational change

A flurry of announcements during September heralds the end of an era in US banking. The banks themselves will hope it also presages a new, calmer period for their own institutions and the financial markets.

John Mack steps upstairs and hands the reins at Morgan Stanley to James Gorman. Ken Lewis announces his intention to stand down from Bank of America. Even Jamie Dimon sets out a succession plan of sorts at JPMorgan.

By the end of the year, most of the names associated with the enormous boom in US banking and markets will be part of that history, not the present or future. Credit must go to Lewis and Mack for seeing their firms through the crisis before handing over. The same cannot be said for the likes of Dick Fuld, Stan O’Neal and Jimmy Cayne. What connects all of these bankers, however, is how closely the fortunes of their firms were connected with their own identities and reputations.

The one banker apparently going nowhere is, of course, Lloyd Blankfein at Goldman Sachs. But Blankfein is different. He is more the custodian of the Goldman tradition than its creator or its identity. Perhaps that’s an example that the next generation of US bank leaders should learn from.

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