Is the current banking model obsolete?

The Financial Times notes that when the dot.com bubble burst, people marveled at how resilient the financial industry was. People were quick to credit the securitization and risk management trends. But now, it all seems so empty. The fact is that the industry's capital base was forced to support away too much in assets, and we're suffering the consequences now. But one has to ask, as the Financial Times does, whether the current banking model is obsolete. The industry may recapitalize, albeit with difficulty. Going forward, it seems like banks will be forced to support more activity directly from their balance sheet. Obviously that will crimp growth. Then again, maybe after the excesses wash out, it will be business as usual again. We'll see.  

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- here's the column