Goldman Sachs 'preparing to close proprietary trading desk'

5 August 2010

Goldman Sachs is considering what to do with staff from its proprietary trading arm as it looks to close down the unit to comply with the new legislation banning banks from making bets with their own money.

Although financial institutions have been given four years to conform to the changes, Goldman Sachs executives are said to be eager to sort out the fate of the traders employed within the division, reports the Financial Times.

Insiders said that potential options include moving workers to its asset management arm or an independent hedge fund, where the majority of the capital would be stumped up by external investors.

The bank is acting early to prevent its star traders being lured to other hedge funds.

Last month, Bloomberg reported that Citigroup is also looking to close its proprietary trading desk and move its team there to its hedge fund unit.

Another option is to spread the employees across the firm's various trading divisions, with the staff being moved to the unit most suited to their speciality.

By Gary Cooper

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