Skip to content

Transforming of Wall Street

Wednesday, February 11, 2009

There was a good article in the weekend edition of the Wall Street Journal that touches upon what I was writing about in a previous post on how bonuses and the flow of money toward the top are just an inevitable outcome of capitalism that is necessary to move the system along.  Specifically:

The industry became much more competitive when commercial banks were allowed into it. The competition tended to commoditize the basic fee businesses, and drove firms more deeply into trading. As improving technologies created great arrays of new instruments to be traded, the partnerships went public to gain access to larger funding sources, and to spread out the risks of the business. As they did so, each firm tried to maintain its partnership “culture” and compensation system as best it could, but it was difficult to do so.

Advertisements
%d bloggers like this: