Knight Capital Group Inc.’s search for investors in the wake of a $440 million loss demonstrates why the biggest Wall Street banks shouldn’t be broken up, according to Brad Hintz, a Sanford C. Bernstein & Co. analyst.
Creditors and counterparties will abandon Knight unless it quickly finds a way to shore up capital, Hintz wrote in a weekend research note. As an independent broker-dealer instead of a bank, the Jersey City, New Jersey-based company can’t turn to the Federal Reserve as a lender of last resort, Hintz wrote.
