New era for prime brokers?

The credit crunch and the implosion of Bear Stearns mark a good opportunity to remake the prime brokerage industry, notes Financial News Online. Bear Stearns saw a lot of good clients run for the hills, which may have played into the hands of the other traditional powers--Goldman Sachs and Morgan Stanley. Most think it still is a a great business, even though some like Bank of America have exited. Lehman Brothers, however, aims to expand. For a while now, more hedge funds have been opting to enter agreements with more than one prime broker--a good way to diversify their risk portfolio. It will be interesting to see how the top brokers respond. Some might focus their efforts on top clients, hoping to eek out a greater share of the total spend.  

For more:
- here's the article from Financial News Online

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