Goldman Reportedly Building An In-House Private Bank

Goldman Sachs GS is reportedly building an in-house private bank, possibly an outgrowth of federal regulations that have limited its means of garnering trading profits. The Wall Street Journal reported Tuesday that the bank will help Goldman boost its deposits, and likely make its results less vulnerable to financial market swings. It's an old-school banking business – earning money by borrowing at low rates and lending at higher ones, and collecting deposits. And it appears to be one move away from a reliance on trading and securitization – the slicing and dicing assets and reselling derivatives. Goldman primarily funds its business today by borrowing cash against its securities – a strategy that backfired for it and other banks during the great recession of 2008. Private banks primarily lend directly to corporations and to wealthy individuals, many of which already have investments and do business with Goldman. The company has no plans to open retail branches or “give away toasters,” CEO Lloyd Blankfein told the Wall Street Journal.