Creed, greed and hubris
The main problem, Augar argues, is that the integration of the big firms means that the Chinese walls between activities that should be mutually incompatible - most notably, equity research and corporate finance advisory work - have been gradually eroded. It's hardly an original complaint, most especially after the inquest on the excesses of the dotcom boom, but it's well explained and analysed.
The end effect is that the big banks are able to put their own interests - both the interests of the bank as an entity, and the interests of the individual bankers - and those of their pet corporate clients (in the hope of winning further lucrative commissions) well above the interests of smaller clients. The bottom line is an estimated $180 billion of value transferred from shareholders (including pension funds, of course) to the bankers.
Unlike some critics, Augar doesn't claim that the bankers are necessarily fully conscious evildoers (not even the ones that enabled Enron's misdeeds, necessarily). Instead, he blames a combination of creed, greed and narcissism for creating an insitutional bentness: an ideological commitment to the supremacy of capitalism and the 'free market'; the aggressively competitive mindset required to pursue a career on Wall Street; and the sense of power fed by the banks' own internal and external rhetoric (where there's very small difference between bullish and bullshit).
Augar's proposal is a separation of powers - basically, a reversal of many of the changes bemoaned in his previous book, The Death of Gentlemanly Capitalism. That would probably be a sensible move but, as another sceptical insider, Edmond Warner, noted in the Guardian last year, one that's highly unlikely to happen.
In investment banking, as in many other areas of endeavour, expect no decline in creed, greed and hubris.