pros of a big investment bank prime account:
1) implicit backstop by the government
pros of an IB prime account:
1) don't need to worry about getting dragged down by other garbage on the balance sheet (commercial real estate might destroy the banks balance sheet this time around, etc)
2) lower leverage
cons of an IB prime account:
1) smaller entity...weaker credit rating.
what to do? diversify is the best bet.
1) implicit backstop by the government
pros of an IB prime account:
1) don't need to worry about getting dragged down by other garbage on the balance sheet (commercial real estate might destroy the banks balance sheet this time around, etc)
2) lower leverage
cons of an IB prime account:
1) smaller entity...weaker credit rating.
what to do? diversify is the best bet.