Goldman Reportedly Building an In-House Private Bank
Goldman Sachs (NYSE: GS) is reportedly building an in-house private bank.
On Tuesday, The Wall Street Journal reported that the bank will help Goldman boost its deposits, likely making 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 while collecting deposits.
It appears to be one move away from a reliance on trading and securitization – the slicing and dicing of 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.
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