Is it the end for standalone broker-dealers? Many believe the fading of the light at Bear Stearns, Lehman Brothers and Merrill Lynch proves that the independent investment banking model is dead. Even the mighty Goldman Sachs and Morgan Stanley are under pressure to explain how they will survive on their own. The new mantra is that investment banks only have a future within large financial institutions.

That view is wrong. Indeed, until recently, investors argued the opposite. Universal banks such as HSBC and UBS have long been accused of being too diverse, their share prices underperforming as a result. Investors complained that global banks lacked focus, or scale in particular businesses. They also found it tricky to identify the revenue benefits from running, say, a wealth management division next to investment banking.