Reuters reported last week that Goldman Sachs at one point recently thought carefully about 'scrapping' its research department and spinning it off as an independent entity. The plan was also said likely to have saved the firm $600m per annum.
The Wall Street firm strongly denied that it ever considered scrapping research altogether, but did confirm that it looked at the possibility of hiving this piece of the business off. There were stories doing the rounds earlier this year that Goldman had a team of people looking at ideas and liasing with regulators in an attempt to see whether more should be done to convince investors about the integrity and independence of its research.
And this is only good news. Any sensible firm has surely been examining all the options since the industry's stock research practices fell under the spotlight and, in many cases, were found wanting. Goldman appears to have reviewed its procedures, adopted the new industry guidelines and has moved on with its research department intact. Nothing wrong with that. A spokesman said: 'We're totally committed to having a research department. You can't run an institutional brokerage business without research'.