Recall that at the height of the financial crisis, Goldman Sachs and Morgan Stanley converted to bank holding companies, in part to gain access to Federal Reserve liquidity programs that helped them weather the storm. Remember also that, in the immediate aftermath of the Lehman Brothers bankruptcy filing, fear was mounting that other banks would follow along.

There is no longer a survival need for Goldman Sachs and Morgan Stanley to remain bank holding companies. They do not have a lot of consumer deposits requiring FDIC backing. And they now have a very good reason to get rid of their bank holding company charters, as they would avoid the Volcker Rule.

The issue was raised by Susquehanna Financial analyst David Hilder in a note to clients that was picked up by Bloomberg. It would certainly be a brazen move, one so obviously designed to avoid compliance. It's certainly doubtful that the Fed and other bank regulators would approve such a move.

Both banks, especially Goldman Sachs, have made moves to comply with the Volcker rule, even before specifics of the rule were finalized. In some cases, the rule might have been an excuse to sell or dismantle various funds or units. Still, it remains an outside likelihood that the banks would move in this manner, no matter how onerous compliance proves. There is still time to influence some of the specifics.

For more:
- here's the article

Related articles:
Wells Fargo mulls Morgan Stanley purchase   
Analyst: Goldman Sachs to break even, Morgan Stanley to post small loss