Broker/Dealer ETF Takes a Beating

05/27/08 - 10:50 AM EDT

Billy Fisher

"I wouldn't be surprised if you see the investment banks come together to better self-regulate and become more transparent out of fear of greater regulation," Morgan postulates.

Regardless of the form of any future regulation, it's likely that the investment banks will proceed to deleverage.

"Today, the form of any increased regulation is just conjecture," Lentell says. "It is likely that they will begin to operate with somewhat lower leverage, though."

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At the time of publication, Billy Fisher was short LEH and GS.
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