Goldman Sachs 'considers move online'

4 December 2008

Goldman Sachs, the Wall Street investment bank that became a bank holding company in the wake of the credit crunch, is reportedly planning to launch a new internet bank.

The move would allow the firm to seek deposits without the expense of establishing a branch network. The deposits could then be used to fund the company's real estate and corporate financing arms, Reuters said.

Goldman Sachs became a bank holding company along with Morgan Stanley in September as the shockwaves of the Lehman Brothers collapse rippled through Wall Street. By abandoning the broker-dealer model, the companies secured permanent access to funding from the Federal Reserve and became eligible to acquire deposit-gathering banks.

While Morgan Stanley has moved to expand its operations with consumer banks, Goldman has stuck to its traditional business strategy of working with institutional investors and corporations.

However, company chief executive Lloyd Blankfein recently said it plans to collect more deposits through various different channels in order to cut its use of short-term debt funding.

Sources told Reuters that while there are no solid plans to acquire a retail bank, such a move has not been ruled out in the future.

Goldman Sachs has been in business since 1869.

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