I timed out yesterday because I knew I was missing something…banks have quarterly earnings and short-term rewards but aren’t crumbling in the same way other financial services institutions are…Roubini cuts to the chase as to why so much of our financial services sector is crumbling…and what the implications are…:

The problem, he says, is that broker/dealers use the same model as banks —
borrow short and lend long — only they borrow on even shorter timeframes, use
more leverage, and don’t have the kind of government backstop banks enjoy.In the
wake of Bear Stearns’ demise, which showed how brokers are vulnerable to a “run on the bank” if they can’t get overnight funding, the Fed temporarily
opened its discount window to brokerage firms. But making that option
permanent means submitting to the same kind of regulation and capital requirements as banks; that, in turn, means a very different business model — and much lower profitability — for Wall Street firms, whose current business model
is “not viable,” he says.With U.S. financial giants like JPMorgan, Citigroup, and Bank of America dealing with internal issues, the most likely buyers are international financial firms or sovereign wealth funds, Roubini says. But unlike in 2007,
foreigners are not going to settle for preferred shares, and non-voting
rights next time around.That raises the questions: Is America ready for (true)
foreign ownership of major financial institutions? And do we have a
choice?