President Barack Obama's economic adviser, Paul Volcker, said his proposed banking rules would force Goldman Sachs and other banks to give up their bank charters if they want to continue proprietary trading.
The implications for Goldman Sachs or any other institution is, do you want to be a bank? Volcker, a former chairman of the Federal Reserve, told the Financial Times. If you don't want to follow those (banking) rules, you want to go out and do a lot of proprietary stuff, fine, but don't do it with a banking license.
Last month, Obama proposed barring banks from betting in financial markets with their own money, known as proprietary trading. Called the Volcker rule, the proposal aims to prevent banks from taking risks that drag them to the brink of failure. The proposal sent shares of major banks tumbling.
Goldman Sachs Group Inc
A Goldman Sachs spokesman declined to comment.
Goldman and Morgan Stanley
(Reporting by Steve Eder; editing by John Wallace)