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发帖数: 784 | 1 http://www.businessweek.com/news/2011-10-12/goldman-may-drop-ba
By Michael J. Moore
(Updates share prices in the 11th paragraph.)
Oct. 12 (Bloomberg) -- Goldman Sachs Group Inc. and Morgan Stanley may
consider dropping their status as bank holding companies to avoid expenses
tied to the Volcker rule, said David Hilder, an analyst at Susquehanna
Financial Group LLP.
The rule in its current form would impose costs on lenders and drive capital
to non-bank market makers, causing the two New York-based firms to consider
whether to stop being banks, Hilder said in a note yesterday, when four
regulatory agencies issued a 298-page draft of the rule for public comment.
Goldman Sachs and Morgan Stanley were the biggest U.S. securities firms
before they converted to bank holding companies after the September 2008
bankruptcy of Lehman Brothers Holdings Inc. Both became subject to
regulation by the Federal Reserve and won access to central bank programs
such as the discount window, which are designed to protect deposit-taking
banks.
“The regulators have proposed a massive new compliance burden on banks to
prove that their market-making activities are just that, and not proprietary
trading in disguise,” wrote Hilder, who’s based in New York. “If these
regulations are adopted in anything close to their proposed form, there will
be large additional costs imposed on banks as market-makers that will not
apply to market-makers not owned by banks.”
David Konrad, a bank analyst at KBW Inc., said Goldman Sachs and Morgan
Stanley are unlikely to change their status as bank holding companies to
dodge the Volcker restrictions.
‘Protecting Deposits’
“If they tried to do that, Congress would amend the rule to say
systemically important banks rather than bank holding companies,” Konrad
said in a phone interview. “This is part protecting deposits, but also part
too-big-to-fail. I don’t think there’s any interest from the investment
banks in doing that, and I don’t think it would serve that purpose.”
Goldman Sachs Chief Financial Officer David Viniar said Jan. 21, 2010, the
same day President Barack Obama announced his support for the Volcker rule,
that it was “unrealistic” to imagine the firm won’t be a federally
supervised bank.
Goldman Sachs and Morgan Stanley made “modest profits” from pure
proprietary trading, which is why they willingly shut down those desks,
David Trone, an analyst at JMP Securities, wrote in a note today. The rule’
s draft indicates regulators won’t interfere with customer flow trading, he
wrote.
Goldman Sachs may be hurt by provisions that limit investments in hedge
funds and private equity, Trone wrote. Had those restrictions been in place
in recent years, they would have cost the firm about $700 million, or 9
percent, of annual earnings, he wrote.
‘Crown Jewel’ Businesses
The rule, named for former Fed Chairman Paul Volcker, was included in last
year’s regulatory overhaul to rein in risky trading that helped fuel the
2008 credit crisis. The central bank, Federal Deposit Insurance Corp. and
Office of the Comptroller of the Currency worked with the Securities and
Exchange Commission on the draft issued yesterday.
Morgan Stanley climbed 45 cents, or 2.9 percent, to $15.84 in New York Stock
Exchange composite trading. Goldman Sachs advanced 2.5 percent to $99.11.
Increased regulation and capital rules may mean the largest banks have to
split off some “crown jewel” businesses, said Roy Smith, a finance
professor at New York University’s Stern School of Business and a former
Goldman Sachs partner.
“You have to ask which parts of the business are they simply not going to
be able to continue to do or maintain the talented people who do it because
those guys would have better options if they left the firm and went to a
hedge fund,” Smith said. “You don’t want to be left with the third team
running your expensive market-making trading desk.”
It’s too soon to say whether banks affected by the rule would have to break
up to remain competitive and the costs of the proposal are likely to shift
some business to smaller players, Glenn Schorr, a Nomura Holdings Inc.
analyst, wrote in a note today. Companies and investors are likely to push
back during the comment period to “dial back” some parts of the rule, he
wrote.
Stephen Cohen, a Goldman Sachs spokesman, and Morgan Stanley’s Mark Lake
declined to comment.
--With assistance from Christine Harper and James Sterngold in New York.
Editors: Peter Eichenbaum, William Ahearn
To contact the reporter on this story: Michael J. Moore in New York at
m******[email protected]
To contact the editor responsible for this story: David Scheer at dscheer@
bloomberg.net |
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