Goldman Sachs (NYSE: GS) plans to stop its proprietary trading of collateralized loan obligations (CLOs), according to recent reports.
The Wall Street bank, which has recently been investigated by regulators over its practices in regard to collateralized debt obligations (CDOs), has already made the move to have their traders handle trades for clients, a person familiar with the matter said, according to a Bloomberg report.
Collateralized loan obligations are a debt type investment, basically packaging loans to form a security that offer an investor different yields based on risk.
Goldman Sachs combined its CLO proprietary trading desk along with its client desk in order to exit the positions on their books. Asset-Backed Alert, a publication that cover the industry, reported the move in its latest newsletter.
