Morgan Stanley and Goldman Sachs requested that they transform themselves into bank holding companies--and they got their wish. As such, they will be subject to greater regulation and definitively answer some big questions about their futures. This marks the end of an era. Stunning! The New York Times notes that the move is an admission that their business models are empty now. This should give the market confidence, something Morgan was in need of especially. Of course, their upside is now limited as well. As commercial banks, they will not be able to leverage and bet the way they used to, but it certainly throws a lifeline to Morgan Stanley. It remains to be seen whether Morgan will continue to seek a commercial bank partner.  

For more:
- here's the New York Times article

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