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(Gimlet-eyed financial entities or not, investment banks are subject to the same irrational commitment to sunk costs and legacy businesses as our friends in the real industrial economy.) Second, capital markets businesses were always large, controlling roughly half the resources of a typical investment bank and sometimes more. Human psychology and organizational theory tell us that it is very difficult to kill a business line with so much human, psychological, and political capital committed to it, plus sharp-elbowed leaders who are committed to fight for it.
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The Epicurean Dealmaker: The K-T Boundary
…aka institutional inertia…
