Did Goldman Sachs’ Latest Move Into Main Street Banking Just Give Us A Warning About The Coming Financial Crisis?
Mac Slavo
April 26th, 2016
SHTFplan.com
If there were ever a signal that large investment banks may be preparing for financial crisis and that they’ll be using your money to bail themselves out when it hits, this could be it.
According to a new report from the Financial Times via The Daily Star, mega-banking giant Goldman Sachs is now getting into the retail banking business and looking for more depositors to help fund their operations. The bank has reportedly “been under pressure to develop new streams of funding” after posting lower than usual equity returns in the first quarter of 2016. In response, Goldman recently acquired a portfolio of 145,000 retail depositors from GE Capital totaling some $16 billion in deposits.
Goldman now intends to aggressively pursue retail depositors whose accounts they will then tap to help fund their investing and trading operations:
The bank last week launched GSBank.com, a platform it inherited via the acquisition of a $16bn book of deposits from GE Capital.
Through that deal it gained about 145,000 retail depositors and is now seeking more, offering annual interest rates of 1.05 per cent on a savings account – many times better than the rates of the biggest US brick-and-mortar lenders such as Citibank, JPMorgan Chase or Bank of America. Stephen Scherr, Goldman’s chief strategy officer, said the aim was to broaden sources of funding for GS Bank, its New York State-chartered lender. Until now, the unit has focused on wholesale funding sources and so-called “brokered deposits”, which are bulk sums that banks acquire from brokers in exchange for high interest rates.
By tapping regular retail depositors, Mr Scherr said, the bank can open up “a different avenue to use, with a different orientation and a different tenor”.
The Rest…HERE
