Goldman Sachs' offering shakes up industry

Once again, Goldman Sachs finds itself in the driver's seat on Wall Street. We've said all along that the movement to pay pack TARP funds, which is very real, has the potential to separate the winners and the losers. Goldman Sachs' move to issue equity, which could happen fairly soon, to pay back TARP funds will certainly prompt others to consider following suit. They don't want Goldman Sachs gaining a massive advantage in recruitment and the added flexibility.

But not all top banks will be able to follow Goldman's lead. Certainly, Citigroup will be hard pressed to raise capital via equity issuance. As for Bank of America, the talk as of late has centered on more exchange offers, but we need to see how the stress tests turn out. JPMorgan and Morgan Stanley will have to reconsider their options now. Morgan Stanley's John Mack not too long ago opposed early repayment. 

For more:
- here's some background from the Financial Times

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