The provisions that seem most damaging to the $850 billion (assets) bank may not affect it much at all. Some might even make it richer. For example:
Derivatives The measure mandates that derivative trading be shifted to organized exchanges for more transparency. Trading accounted for 78% of Goldman's $21.6 billion in revenue in the first half of 2010, and much of that involved over-the-counter derivatives, which carry higher margins than their exchange-traded equivalents.
But Goldman is welcoming the shift to the exchanges, because in a business where profits come from volume and speed of execution, Goldman tends to win. [...]
Proprietary Trading The "Volcker Rule" (named after former Fed Chairman Paul Volcker, who proposed it) bans banks from engaging in short-term trading solely to earn a profit. Goldman does a lot of this across its fixed-income and equities trading businesses, which together accounted for 63% of revenue in the first half of this year. It's likely to spin off a stock-trading division with $900 million a year in profit, says Rochdale Securities analyst Richard Bove, although it might grab back much of that sum through a management contract. A $10 billion Special Situations Group, which trades various types of debt, might survive. Buying a client's debt, after all, looks a lot like lending money.
Capital Requirement Goldman would be hurt if it were required to set aside significantly more capital for its riskier activities, such as bond trading or maintaining an inventory of securities for clients to buy. But it's doubtful the requirements will be too stiff because of political resistance to pushing capital standards too high and hurting the competitiveness of the banking industry.
Exactly. It's doubtful the requirements will be too stiff because of political resistance to pushing capital standards too high and hurting the competitiveness of the banking industry. And of course there's absolutely nothing to address Too Big To Fail. Indeed, Goldman still has a near-trillion-dollar balance sheet (and who knows how much they are hiding off-balance-sheet).