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Entries in Volcker Rule (1)

Tuesday
Oct182011

Goldman Sachs Experiences First Quarterly Loss Since 2008

in Lee/Bloomberg via Getty Images(NEW YORK) -- Just after the Occupy Wall Street protest celebrated its one-month anniversary, third quarter earnings season continued with Goldman Sachs, which reported its second quarterly loss in its history as a public company.

This loss was greater than expected and marks the company’s first quarterly loss since its fourth quarter in 2008.

It is unclear how the Volcker rule, which proposes to ban banks with insured deposits from "high-risk," short-term trading with its own funds, will affect banks' financial results. David Hilder, analyst with Susquehanna International Group, said Goldman Sachs and Morgan Stanley may exit the banking business if compliance regulations of the Volcker rule are implemented.

The rule is expected to be implemented next year.

Hilder said those two banks are less dependent on deposits as a source of funding than other banks.
Investment banking client activity may have slowed due to uncertainty in the global economy, especially in Europe, which has led to lower profit expectations for banks more heavily invested in the capital markets.

Meanwhile, Bank of America reported a six percent increase in profit. Citigroup also reported increased earnings Monday, and Morgan Stanley will release its quarterly report Wednesday.

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