Goldman Sachs Shutters Principal Strategies Unit
Down)
According to a report from Bloomberg on Friday, Goldman Sachs Group Inc. (NYSE: GS) is closing its principal-strategies unit that is responsible for investing the bank's own funds.
The move by the New York-based firm is to comply with the Volcker rule and the recent financial regulatory reform that were put in place to limit the risk that bank’s can take.
The unit currently employs 65 to 70 workers, according to the report from Bloomberg citing two people familiar with the matter. Some of the employees could be transferred to other divisions within the company.
Goldman has said that it currently sees roughly 10 percent of its revenue from proprietary trading, but must wind down these practices to comply with the Dodd-Frank financial reform act that was signed into law in July.
Media reports earlier in the wee said that JPMorgan Chase &Co. (NYSE: JPM) will take a similar measure to come into line with the new regulations.
Congress had placed the so-called Volcker Rule into the financial reform earlier this year after President Barack Obama got behind the idea as a way to limit the risk taking of Wall Street banks following the recession and the subsequent bailout of the financial industry.
Shares of Goldman Sachs are up 5.55 percent to $147.54 in midday market movement on Friday.
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The move by the New York-based firm is to comply with the Volcker rule and the recent financial regulatory reform that were put in place to limit the risk that bank’s can take.
The unit currently employs 65 to 70 workers, according to the report from Bloomberg citing two people familiar with the matter. Some of the employees could be transferred to other divisions within the company.
Goldman has said that it currently sees roughly 10 percent of its revenue from proprietary trading, but must wind down these practices to comply with the Dodd-Frank financial reform act that was signed into law in July.
Media reports earlier in the wee said that JPMorgan Chase &Co. (NYSE: JPM) will take a similar measure to come into line with the new regulations.
Congress had placed the so-called Volcker Rule into the financial reform earlier this year after President Barack Obama got behind the idea as a way to limit the risk taking of Wall Street banks following the recession and the subsequent bailout of the financial industry.
Shares of Goldman Sachs are up 5.55 percent to $147.54 in midday market movement on Friday.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
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