Goldman Sachs' Next Chapter as NY State-Chartered Bank

Goldman Sachs applied for a NY State Bank Charter yesterday, in a move to becoming a full-service bank. The NY Times points out, "The announcement does not mean a move for Goldman Sachs, which has been based in New York City since its founding in 1869. But it does provide glimpses of Goldman’s roadmap as it transforms itself into a commercial bank."

Governor David Paterson said Goldman Sachs' "decision to base their U.S. operations in New York State is a real reflection of their confidence in our State's ability to effectively regulate and represents a bit of good news for our troubled markets. We look forward to working with them as they transition a substantial portion of their business from an investment bank to a new regulatory scheme. New York is the hub for international finance and Goldman's decision today builds on a strong foundation.”

The Goldman Sachs Bank USA, which will have $150 billion in assets, will combine its trust company in NYC with its loan company in Utah and other businesses. The Times also notes that since Goldman is not applying for a national charter (which is what other banks like Citigroup and Bank of America have, "allowing them to open branches across states without separate applications"), it suggests the "firm is not interested in a national consumer-focused business," focusing on wealth management, not retail banking.

Photograph of Goldman CEO Lloyd Blankfein on Wall Street last Friday by Mark Lennihan/AP