Goldman Sachs (GS) Spin-Off Of Prop Trading Not In the Cards
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Price: $1,055.29 +3.36%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.1%
Revenue Growth %: +9.9%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.1%
Revenue Growth %: +9.9%
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According to FOX Business Network's Charles Gasparino, Goldman Sachs Group Inc. (NYSE: GS) will not spin off its proprietary trading business, despite new federal regulations that will restrict risky trading by banks.
"Under the Volcker Rule if you are a big bank, you can't do proprietary trading,” Gasparino said. "You can’t trade with the firm's own money. There has been lots of talk about the spinoff of this into someone buying it, into a separate firm. That never was in the cards."
Goldman has reportedly been looking to spin off its proprietary trading business to comply with the Volcker rule that will restrict the risky trading endeavors of commercial banks. Risky trading was seen as a catalyst for the recent economic recession and the subsequent bailout of major Wall Street firms by the taxpayers.
"First priority for Goldman Sachs is to find different places for those proprietary traders to work. Second priority is maybe fold the proprietary trading desk… into an existing fund in the asset management division. The third choice they have is they create a separate hedge fund inside the asset management division. They tell me now that’s the least likelihood."
"What they tell me over there – there was never any plan to spin the equity proprietary trading desk off, meaning sell it, move it out of the firm. That was never in the works."
Shares of Goldman Sachs closed regular trading on Monday down 1 percent to $146.74.
"Under the Volcker Rule if you are a big bank, you can't do proprietary trading,” Gasparino said. "You can’t trade with the firm's own money. There has been lots of talk about the spinoff of this into someone buying it, into a separate firm. That never was in the cards."
Goldman has reportedly been looking to spin off its proprietary trading business to comply with the Volcker rule that will restrict the risky trading endeavors of commercial banks. Risky trading was seen as a catalyst for the recent economic recession and the subsequent bailout of major Wall Street firms by the taxpayers.
"First priority for Goldman Sachs is to find different places for those proprietary traders to work. Second priority is maybe fold the proprietary trading desk… into an existing fund in the asset management division. The third choice they have is they create a separate hedge fund inside the asset management division. They tell me now that’s the least likelihood."
"What they tell me over there – there was never any plan to spin the equity proprietary trading desk off, meaning sell it, move it out of the firm. That was never in the works."
Shares of Goldman Sachs closed regular trading on Monday down 1 percent to $146.74.
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