Inadequate broker/dealers?

Bloomberg has an interesting article on Goldman which again highlights the preferential capital position of the US broker/dealers vs. the banks.

Less than 48 hours after a government-backed deal rescued Bear Stearns Cos. from bankruptcy, David Viniar, Goldman Sachs Group Inc.'s chief financial officer, was asked if the crisis would have ``permanent implications'' for Wall Street's appetite for leverage. His answer: ``No, I don't.''

Tell that to his rivals, most of whom are selling assets, raising additional capital and hoarding cash as they grapple with unprecedented losses. The financial industry has booked more than $230 billion of writedowns and losses, as debt securities, mostly held with borrowed money, plummeted in value.

Goldman alone is holding course, refusing to trim its leverage, a measure of how reliant a firm is on debt. The adjusted leverage ratio of assets to equity jumped to 18.6 at the end of February, from 17.5 at the end of November. ``We have no need as we sit here right now to shrink our balance sheet,'' Viniar told analysts on the March 18 conference call.

Now we don't know what the composition of Goldman's BS is. But it is safe to suggest most of it will be assets that are 100% weighted under Basel 1. On that crude basis, Goldman's capital ratio is roughly 5.4% (= 1/18.6) vs. a minimum of 8% for a bank. Surely this at least suggests the possibility of smelling a rat?

Update. Another Bloomberg article puts a more diplomatic version of the same question:

The U.S. has allowed a number of institutions such as Bear to emerge that really are in the business of doing what banks do but haven't been folded into the banking system in a way that affords them the same kind of protection from runs that banks have.