So long as the primary leverage in an investment bank's business was people (skills, relationships), they were happy being partnerships. In the 80's as investm

So long as the primary leverage in an investment bank's business was people (skills, relationships), they were happy being partnerships. In the 80's as investment banks discovered the joy of trading profits, they realised they could then leverage capital (pun intended). That therefore led to their finding more capital, in one of three ways, all which started to happen in the next 10-15 years : merging with commercial banks (which in turn allowed commercial banks to earn larger returns on their capital ... much better than lending to the neighbourhood convenience store); going public; and pressuring regulators to allow higher debt/capital ratios. So, as with everything, a simple matter of incentives.