As more bank stocks remain mired below their book values, we may hear more calls for bold and dramatic action--like calls for banks to break themselves up. This is to be expected at a time like this, and we've heard talk about the shareholder value-unlocking benefits of breaking up Citigroup and especially Bank of America.

Breakingviews expands the discussion to Goldman Sachs, suggesting that such a move would be beneficial to shareholders. Obviously, this is not likely to happen. I doubt the board would even entertain the idea. Few banks would ever agree that they are worth more in separate pieces than they are now. But it's instructive to think about this.

If Goldman Sachs were to be broken up into three pieces--- investment banking, asset management, and institutional clients services---what would the result be? The article argues that the value of asset management and investment banking, together with the principal investments Goldman Sachs holds in the likes of ICBC, account for all of the current market capitalization, or $53 billion. The vaunted institutional client services arm, which has been the driver of growth through the boom years, "comes for free."

Despite the on-going travails, I doubt anyone would agree that the unit is worth nothing.  Still, I doubt we'll see a lot of shareholders jump on this bandwagon, but it is interesting.

For more:
- here's the item

Related articles:
Fed blasts Goldman Sachs over Litton practices  
The CEO transition implications of lawyering up at Goldman Sachs