Although many believed that the recently passed financial reform legislation would hinder Goldman Sachs Group Inc. (NYSE: GS)’s ability to make risky trades and generate revenue, the Los Angeles Times reported that the new financial reform law may actually help the investment banking firm.
When the legislation passed in July, analysts first predicted that as much as 10% of Goldman Sachs Group Inc. (NYSE: GS)’s earnings could disappear given the law’s new restrictions. However, according to the Times, senior Goldman executives recently advised analysts privately that the bank did not expect the new legislation to cost it any revenue.
“The statement was perhaps surprising in its level of conviction,” Bank of America Merrill Lynch analyst Guy Moszkowski wrote in a note to clients, “but we’ve learned to take such judgments from G.S. very seriously.”
Rochdale Securities analyst Dick Bove said that he change his view of the law’s effect on Goldman Sachs Group Inc. (NYSE: GS). “I thought this company was going to be really harmed by this bill; now I’ve figured out that it’s not going to happen,” he said. “They should win big here.”
The Goldman Sachs Group, Inc. (Goldman Sachs) is a bank holding and a global investment banking, securities and investment management company. The Company provides a range of financial services to customers, including corporations, financial institutions, governments and high-net-worth individuals. Its depository institution subsidiary, Goldman Sachs Bank USA (GS Bank USA), is a New York State-chartered bank. It operates in three segments: Investment Banking, Trading and Principal Investments and Asset Management and Securities Services. In March 2010, the Company’s subsidiaries sold the La Francia mine and related infrastructure assets, including Concession 5160, and Adromi Capital Corp., the holder of the La Francia II concession, to a subsidiary of The Goldman Sachs Group, Inc. In May 2010, Nexen Inc. sold its natural gas trading operations to a unit of The Goldman Sachs Group, Inc.
Shares of Goldman Sachs Group Inc. (NYSE: GS) opened at $159.30 during trading on Wednesday.
