US Government may pass a law to ensure that Investment Banks are split out from Commerical Banks. What this probably entails is that only Commercial Banks will continue to enjoy protection from the government and thus preserve their AAA, AA ratings.
Investment Banks (the likes of Goldman) may lose the implicit government protection and thus results in a rating drop to A. This will increase their cost of capital by 10-80 basis points (comparing treasury bills with A rated bonds).
Looking at their capital base (total liability) of nearly 800b, an increase of 80 basis points will mean an increase in 6.4b interest expenses.
This will reduce their 13b profits to 7b.
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