Analyst Plan Described As 'Drastic'

Spitzer has been suggesting that one answer to the problem of possible conflict between research analysts and investment bankers is simply to split off the two functions into different businesses. Pitt responded by saying that 'the notion of government requiring divestiture is a very serious step and should only be taken when there is no other potential solution to the problems that caused it.'

In essence, if Spitzer has his way, stock research would be undertaken by businesses independent of the investment banks and the banks would be prohibited from publishing research recommendations.

This notion is a fine idea, but has one fatal flaw. Clients have demonstrated that they are not prepared to pay for stand-alone research and it will be difficult for any business providing this service to make it commercially viable.

Spitzer must know this and his veiled threat must therefore be seen as just that.