Benefits of a universal bank?

Insured deposit base to fall back on instead of reliance on wholesale funding.

Edit: I guess that is only necessarily true in the US, not sure what deposit insurance is like in places like Europe, Dubai, China, Japan, et al.

It calms down IRRATIONAL investors. You can't use low cost, federally insured deposits to finance trading operations, so it is absolutely pointless. GS and MS will still have to roll out commercial paper.

Literally, the only good thing about being a universal bank is that it MIGHT lower the cost of borrowing, as commercial banks are considered more stable and the iBank will be considered part of the larger entity, therefore driving down borrowing costs.

However, those costs shouldn't be up in the first place, because MS and GS are very stable and well capitalized

on a response to this about what i see as a temporary infatuation (albeit necessary for ibanks) with universal banking activity...but the economist totally stole my ideas (tho they prolly did a better job of presenting them anyway).

Investment banking
Is there a future?

Sep 18th 2008
From The Economist print edition
The loneliness of the independent Wall Street bank

http://www.economist.com/finance/displayStory.cfm?source=hptextfeature&s...

Benifits or not - just a few months back, people were calling Pandit to break up Citi as Reed said that the universal banking model simply does notwork.

UBS chairman Peter Kurer : Our review has clearly revealed the weaknesses associated with the integrated 'one firm' business model

... And in just a few months, universal banking is the way to go even for GS!?

Can't Wall Street make up its mind?? or has the situation changed so drastically in a few months? or am I missing something?