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Are you saying that there's effectively no way for a bank like Goldman Sachs to spin of some of it's devisions as separate companies even if it's management wanted it?






It can't do a spinoff that substantially reduces it's assets unless it can satisfy it's creditors that the risk of d3efault on its obligations is not going up.

A simplified example: you are likely to go bankrupt in the near future and you also owe me a large amount of money. You also own profitable business that you run with your son. You can't decide to slit the company in half and give one half to your son. If you try I can sue you for trying to remove assets that I have a claim on from the bankruptcy court.

A scaled up version of this is what most of the big banks are facing right now. Goldman Sachs is looking a little batter than some of the other banks but only as long and the debts of other financial institutions that are a large part of its "assets" hold their value.
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