They've been at each other's throats for years. In that time, the relative fortunes of investment bankers and traders ebbed and flowed as both tribes fought for supremacy at their firms. In these capital-strapped times, the battle is reaching a dramatic finale.

As banks deleverage and new regulations require them to hold more in reserves, they need to decide where and how to deploy scarce capital to the maximum effect: can a bank's balance sheet be best deployed in the service of its clients or its trading books?