Most investment bankers think a lot of themselves, but they seldom crow about their competitors' troubles in public. So it came as a surprise when Gary Cohn, the president of Goldman Sachs, told a press conference in Brazil in April that banks other than his and JPMorgan were "taking a pretty substantial step back from the markets" in a way that had not been seen "in the entire history of banking". He was not exaggerating. Across the world the investment-banking industry is caught up in an unprecedented wave of de-leveraging and deglobalisation. In large parts of the rich world most banks are shrinking their balance-sheets, retreating from foreign operations and closing businesses. This is dramatically reshaping the industry. In future it will increasingly be polarised into, on one hand, a handful of global "flow monsters" that stand astride global capital markets, and large numbers of much smaller regional and domestic banks on the other.
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