Back in July, when Goldman Sachs (GS -0.23%) CEO Lloyd Blankfein announced the creation of a private bank-within-a-bank to serve its wealthiest customers, he went out of his way to say that Goldman wouldn't be pitching credit cards or giving away toasters. On Friday, Financial Times reported that Wall Street's savviest shop filed paperwork with its New York regulator to open a London branch.

Given the Brits' well-known love affair with toast, Blankfein may have to reconsider his position on toaster giveaways. But Goldman's move into London should also provide comfort food for investors who, post financial crash, have been wary of investing in high-flying Wall Street banks.

On backing into big opportunities
 Goldman's new British branch will be in the same building as its current London corporate headquarters, and will specifically be part of Goldman's commercial bank: its first overseas expansion. A person familiar with the matter told Financial Times that this application was a formality, designed to let Goldman's commercial bank do business in the U.K.

Goldman took on bank holding status at the behest of the Federal Reserve in the darkest days of the crash. Switching status from a pure investment bank to a bank holding company gave Goldman much needed access to the Fed's discount window (read: cheap money) at a time when there was a Wall Street bank run in progress.

Having "backed into a big opportunity," as Blankfein himself put it, Goldman is slowly but surely making the most of its commercial-bank. The private bank alone had already accumulated $50 billion in deposits and $100 billion in assets as of July. 

It's good to be in London
There's something strange happening on Wall Street, for both investors and for the rest of us, and for once, that's a good thing.

A combination of stricter domestic and international regulation in the wake of the financial crash has led all the big banks to reevaluate their business models, moving them increasingly away from the highly profitable yet highly volatile proprietary-trading models that saw them book record profits in the 1990s and 2000s, into the more boring but infinitely more stable lines of business -- like lending money -- that used to be banks' whole raison d'etre.

So with its new private bank, Goldman will be lending money to clients and making money back on interest, just like all banks used to do. And it will be doing it in London, a city, like New York, where there's plenty of wealth to chase. And Goldman isn't the only Wall Street bank going the back-to-basics route:

  • Morgan Stanley (MS 0.10%), the other pure investment bank forced to accept bank holding company status in the depths of the crisis, just inked a deal to buy the remainder of Morgan Stanley Smith Barney out from Citigroup (C -0.32%). MSSB was almost instantly renamed Morgan Stanley Wealth Management, a sign of Morgan's commitment to the wealth-management end of the banking business it's pinning much of its hopes on.
  • JPMorgan Chase (JPM 0.49%) just snapped up $728 million worth of a German residential mortgage-backed security (highly desirable due to the stability of the German residential property market and significant collateral the bond issuers posted). This will earn the bank a nifty 4% return, considerable in today's yield-tame world, and just the kind of traditional investment the bank is looking for in the wake of the London Whale derivatives trade that cost JPMorgan nearly $6 billion. 

Here's to you, Lloyd
These are all signs, however small, that regulation is slowly starting to do its job of making banking more boring, and hence more safe. And the more boring these banks become, the easier it will be for investors to get their heads around how they do business. This should drive increased investment and therefore higher share prices. Everyone wins, even Lloyd Blankfein, which really should make him reconsider his bank's stingy no-toaster policy.

Thanks for reading, and for thinking. Speaking of toast, here's something to raise a glass to: our new in-depth report on Bank of America, a bank undergoing its own series of post-crash changes. The report concisely details B of A's prospects, and highlights three reasons to buy and three reasons to sell. Just click here to get access.