Richard Nesbitt: end is nigh for Goldman and Morgan Stanley
He may be new to investment banking, but CIBC World Markets CEO Richard Nesbitt was quick out of the gate today with his own prediction regarding the fallout of Lehman’s bankruptcy filing. According to Bloomberg, Mr. Nesbitt believes the days of the large independent investment bank are about to end:
“I don’t think around the world there’s any place for a large investment bank unless they’re part of a commercial bank,” Nesbitt told investors at a conference in Toronto today. “I don’t think they’ll exist, except for the very, very tiny investment dealers.”
Since many CEOs won’t stick their necks out with a public prediction of any sort, I admire Mr. Nesbitt for making his views known. Particulary when Goldman’s market cap. is US$53 billion, Morgan Stanley’s is US$36.5 billion, and CIBC’s is just US$21.8 billion.
Tough times deserve some frank talk, even if it strikes the shareholders of Goldman Sachs (GS:NYSE) and Morgan Stanley (MS:NYSE) as heresy. I think he’s wrong, but that’s what makes a market.
(disclosure – I own GS)