Banking the Old Fashioned Way

Ha!  Wouldn't that be the best joke of a fairly unfunny financial crisis?  Dealbook points out that the Volcker rule, with its limit on prop trading, may drive some full-service banks back to old-fashioned utility banking.

You remember banking: some guy who looked like Jimmy Stewart presided over a Greek revival projection of stability at the corner of Elm and Main.  He took deposits, he made loans, he played a lot of golf.    He didn't make a ton of money and we made fun of him behind his back but we needed him.  These past few years, a few of us oldies have been wondering whatever happened to him, and wondering whether we might lure him back.

Of course he won't come back--as Heraclitus famously observed, you never step into the same sewer twice. But if Dealbook is right, then maybe something like utility banking is in our future, as full-service banks try to make the best out of a (for them) bad thing.

But here's the joke part: apparently two who will not profit from this turnaround are Goldman Sachs and Morgan Stanley.  Why?  Because they weren't really utility banks in the first place.   They were traders and investment bankers who jumped into mama's arms when the bears howled.  Okay, they will say they had no second choice.  But I'm remembering the axiom that you should be careful what you wish for, because you might get it.