Don’t write off Goldman Sachs. Yes, it may be lagging the pack this year. Yes, it may be coming off the back of a year when it cut more staff than usual. But it has a plan, and that plan is getting rid of the Volcker rule.
The Financial Times has interviewed a series of people familiar with the bank’s plans, and suggests that Goldman’s big issue for 2017, particularly now that it has former members of the firm in positions of power within the U.S. government, is rolling back the regulation that limits banks’ ability to trade off their own book. Gary Cohn, Goldman’s former number two is head of the national economic council, while Steven Mnuchin, who was previously its chief information officer, is Treasury Secretary.
Goldman is single-minded, suggests the FT. “Their single focus this year, more than any other bank, is the Volcker rule,” the Washington chief of another bank said. Dennis Kelleher of Better Markets, which advocates tougher regulation, added: “Goldman has always been the big swashbuckling trader that wants to take huge risks and huge leverage for the big score.”
Not that Goldman wants to come out directly and say it’s in favour of softer regulation for the banking sector, or that it wants to repeal rules that make it harder to take big risks. Its tactics are instead to toe the line of other financial institutions – “whatever the industry view is, it has to be their view” – but one bank lobbyist claims Goldman “don’t play well with others. Unless there’s something they want and feel collectively they can do”. It’s currently showing a united front through trade group Securities Industry and Financial Markets Association (Sifma).
Cohn has said: “Right now we’ve got this massive set of regulations built to regulate all banks as [if] they’re equal. We may be able to tailor regulations for different aspects of the financial markets and different aspects of the financial institutions.” Rival banks’ lobbyists have taken this as favoring non-universal banks, like Goldman.
Michael Barr of the University of Michigan, who helped craft Dodd-Frank at the Treasury department, says: “What the administration seems to mean is let’s return to prudential regulation focusing on banks — not the investment banks, holding companies, insurance companies or shadow banking activities. What they [officials] mean is let’s go back to the world we mostly had before the financial crisis.”
Separately, are you feeling that the ‘thrill’ has gone from your banking job? Do you trudge your way into work? If so, it may simply be down to your age. Research by recruiters Robert Half, featured in Bloomberg, suggests that workers over 35 are twice as likely to be unhappy in their jobs as younger workers. Once you hit 55 it gets worse – a third of the 2,000 people surveyed by said they didn’t feel appreciated and 16% said they had no friends at work.
In banking, there’s no shortage of people hitting 40 and then seeking a second career. Most tell us it’s because the industry has changed, or that they no longer feel challenged, or that they’re not earning as much money. But maybe, the spark has just gone.
TD Securities is hiring 10 bond traders in its new Brexit hub in Dublin (Bloomberg)
Central Risk Book trading is emerging as the place to be. J.P. Morgan has hired a VP, Simon Sheffield, from Goldman Sachs to lead its desk in Europe (Financial News)
J.P. Morgan has donated $1m to fight hate groups (Financial News)
Eric Daniels, the former CEO of Lloyds Banking Group, is suing the bank for £1m in unpaid bonuses (Financial Times)
Goldman invests more in technology companies than any other non-tech Fortune 500 company (Quartz)
Citadel has hired a Deutsche Bank research analyst (HFM Week)
There’s another banker in the Great British Bake Off (Evening Standard)