Oct 23 Goldman Sachs Group Inc said on
Tuesday the bank's senior management had never "seriously"
looked at spinning off all or part of its commodities business,
as the bank faces tougher regulations that restrict its trading.
The Wall Street Journal reported on Tuesday that Goldman had
held "preliminary internal discussions" in recent years about
splitting off its commodities business. The newspaper cited
people briefed on the discussions in its report.
"While we constantly evaluate all our businesses, senior
management never seriously looked at spinning out all or part of
our commodity business," Goldman Sachs spokeswoman Sophie
Bullock said in an email.
The news comes as Morgan Stanley, Goldman's
traditional rival in commodity markets on Wall Street, is
weighing a possible sale of a majority stake in its commodities
business to Qatar's sovereign wealth fund.
Wall Street banks, including Goldman, Morgan Stanley and
JPMorgan, face tougher regulatory restrictions on
proprietary trading under the Volcker rule contained in the
Their ownership of physical commodity assets, like power
plants, oil storage tanks and metals warehouses, are also in
jeopardy after Goldman and Morgan Stanley converted to Bank
Holding Companies at the peak of the financial crisis.
The Bank Holding Company Act allows banks to trade in
physical commodity markets, but restricts their ownership of the
The Volcker rule limits banks to largely trading on behalf
of their clients.
(Reporting by David Sheppard; Editing by Maureen Bavdek)