First Coney Island closed for good, then Yankee Stadium shut off the lights, and now another venerable New York City institution is being called dead — Wall Street, as we know it. (Don’t worry, we’re going to keep ‘fighting’ it in its new incarnation).

All the talk of Wall Street being no more comes from the news that Goldman Sachs and Morgan Stanley, the last two standing major investment banks announced they are now becoming bank holding companies.

How is this different from what they were before? Well, they were worried they would be taken over by commercial banks (like Merrill Lynch and BofA last week) or have to file for bankruptcy (Lehman Brothers). In order to avoid making that big decision, they essentially asked the Fed if they could ‘become’ commercial banks.

This new classification will allow Morgan and Goldman (the two guys we all thought would make it out of this one alive because they were halfway decent) to add commercial banking divisions and raise much needed funds. It’s not clear exactly how they plan on becoming these new commercial banks, referring to whether it will be in name only or we’ll actually have the chance to get that Goldman Sachs debit card and checking account we’ve always dreamed about.

One change from investment banking will be a shift from under the auspices of the SEC to the divine wisdom of Ben Bernanke and the Federal Reserve. The new players will get permanent access to the Fed’s liquidity ‘sustenance’ devices. Drink up, boys, the taxpayers are paying for it.

This relates to the notion of ‘Wall Street dying’ because these big investment banks have come to represent the culture on Wall Street of huge deals and huge egos. (For a quick refresher course, check out the bankers in this video made by the Damn, It Feels Good To Be A Banker author, who btw, chose the worst time ever to release his book. Ouch.)

Now that Lehman, Merrill, Goldman, Bear, and Morgan have either died or ‘gone commercial’ on us, things might start to look drastically different. As a whole, the finance world will experience a major case of shrinkage. Over the past 6 years, the finance world ballooned with massive pay checks and even bigger office buildings stuffed with employees. There will be a severe ‘thinning’ out taking place, but the real question is will it ever return to its glory days?

AP: Last major investment banks change status, September 22, 2008