“In the end, Goldman Sachs is still going to be Goldman Sachs,” Lloyd Blankfein recently remarked during a wide-ranging dinner conversation with Larry Fink, CEO of money management outfit Blackrock, according to people with direct knowledge of the matter.
Fink, seated next to Blankfein at a tony New York City eatery, didn’t disagree, but some in the firm that Blankfein runs are now taking issue with that statement.
That’s because Goldman (GS: 92.00, +1.02, +1.12%) is looking to alter its business model that for the past decade produced huge earnings by making massive trading bets in various markets across the globe, according to people with knowledge of the matter. Exactly what that new business model Goldman will adopt is still unclear, these people say.
But some clues are emerging, according to people at the firm. The firm has told analysts that it will expand its asset management business -- even possibly buying one -- the FOX Business Network has learned.
Regulators are also pressuring the firm to scale back on its business of taking trading risk, the driver of Goldman’s strong profits over the past decade. The Dodd- Frank financial reform law prevents firms from engaging in so-called proprietary trading where it risks its own capital to take market bets, but regulators are also forcing Goldman to scale back on other trading activities, including those that involve buying and selling securities on behalf of clients.
Read more: http://www.foxbusiness.com/industries/2011/12/21/goldman-preps-for-new-age-regulation/#ixzz1hFBIgTHs
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