Despite having four years to comply, Goldman Sachs is following the track that most of Wall Street has taken and is getting ahead of the Volcker Rule now.
The investment banking giant is reportedly winding down operations at its Global Macro Proprietary Trading desk as it looks to comply with Dodd-Frank, which restricts banks from trading their own funds. This comes on the heels of reports last summer that the firm dismantled its Principal Strategies unit, which industry sources speculated managed between $1 billion and $2 billion.
Citing sources familiar with the matter, the Wall Street Journal said the Global Macro Prop Trading unit made bets with Goldman's money in the FX, interest rate, equities, commodities and other fixed income markets.
From the WSJ:
Goldman has run the trading operation for decades. While it was smaller and less prominent than Goldman Sachs Principal Strategies, a proprietary-trading desk that focused on stocks, the Global Macro Proprietary Trading desk spawned noteworthy careers of several fixed-income hedge-fund managers and investors.
Meanwhile Goldman is far from alone on Wall Street in speeding up the compliance process. JPMorgan Chase and Bank of America will shutter or sell of their own prop trading segments, while Morgan Stanley's could be spun off over the next few years.As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio