The Goldman Sachs Group, Inc. will become the fourth largest Bank Holding Company and will be regulated by the Federal Reserve.
In recent weeks, particularly in view of market developments, Goldman Sachs has discussed with the Federal Reserve its intention to be regulated as a Bank Holding Company. Since the spring of this year, the Federal Reserve has been reviewing liquidity and funding profile of Goldman Sachs, capital adequacy and overall risk management framework. The Fed has maintained banks Tier 1 capital levels well above the Federal Reserves well-capitalized threshold of 6% since these ratios were first calculated in 2004.
“When Goldman Sachs was a private partnership, we made the decision to become a public company, recognizing the need for permanent capital to meet the demands of scale,” says C. Blankfein, Chairman and CEO of Goldman Sachs. “While accelerated by market sentiment, our decision to be regulated by the Federal Reserve is based on the recognition that such regulation provides its members with full prudential supervision and access to permanent liquidity and funding. We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources.”
D.C.