Goldman Sachs Moves From Wall Street Into Main Street

Goldman Sachs, long known for its super-rich clients and well-connected executives, is starting to act a lot more like a neighborhood bank. The most Wall Street of Wall Street firms really wants people to start thinking about it the next time they need to open a bank account or borrow money. “We want to grow a robust consumer banking business,” said Stephen Scherr, Goldman’s chief strategy officer and CEO of GS Bank. Goldman’s retail banking business is less than 2 years old and tiny compared with the overall size of the firm. Trading is inherently a volatile business, and a quiet market weighed on Goldman’s second-quarter results posted last week. Fixed income, currency and commodity trading revenue fell 40 percent, and Chief Financial Officer Martin Chavez said its commodities division had its worst quarter since the firm went public in 1999. Goldman executives see the new consumer banking division as a way for the firm to expand into businesses it traditionally wasn’t involved in. An online savings account with its GS Bank requires no minimum opening deposit and pays an interest rate of 1.20 percent. Analysts say it’s not unreasonable to think that Goldman may consider checking accounts and student loans. At the height of the crisis, Goldman and its rival Morgan Stanley — both trying to avoid the bankruptcy fate of Lehman Brothers — converted from investment banks to commercial banks. Online lending has exploded in the last few years — which has raised concerns about the industry getting too big too quickly.