Goldman Sachs Dodges $40-Billion Bullet (Bloomberg)
Wall Street stalwart Goldman Sachs narrowly escaped having an enormous chunk of its revenue curtailed by the Volcker Rule. The five government agencies overseeing the application of this rule — designed to curb banks’ ability to put funds at risk through speculative trading — exempted market-making desks and some hedging activities from the provisions of the law. By doing so, they enabled international financial institutions like Goldman to continue participating in this $40-billion-a-year activity. Of all of the Wall Street banks affected by the Volcker Rule, Goldman Sachs had the most to lose, as it derives the largest portion of its annual revenue from trading. Investors in Goldman Sachs also breathed a sigh of relief and pushed shares to their highest level in three months at $169.73.