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The recommendations established in the Basel II accords hope to ensure banks exposing themselves to greater risk hold greater capital to shield their depositors. - 


Stacey Vanek-Smith: Of course, AIG's not the only company in major trouble. Washington Mutual and Wachovia have also been named as having grave financial problems. But some regional banks might profit from this downturn. As Rachel Dornhelm reports.

Rachel Dornhelm: Middle-market investment banks are scattered throughout the country, like Piper Jaffrey in Minneapolis and Broadmark Capital in Seattle. And they include commercial banks, like Sun Trust in Atlanta, that jumped into the field when Congress deregulated the industry nine years ago. James Barth with the Milken Institute says they could benefit from New York's financial woes.

James Barth: Obviously, this gives them a greater opportunity to conduct their business when some of the bigger institutions are viewed as quite weak.

But Baruch College finance professor Linda Allen doesn't see a windfall for mid-tier firms.

Linda Allen: If customers are going to be looking to deal with a financial institutions, my feeling is that they're going to prize size even more so after this crisis than before.

Once the dust settles, she says, the remaining big investment banks like Morgan Stanley and Goldman Sachs are likely to pick more business. Allen says they're in a better position to put together the type of financing that had been Lehman Brother's bread and butter.

I'm Rachel Dornhelm for Marketplace.