Goldman Sachs given two years

Lloyd Fonzie Blankfein

Goldman Sachs will have another two years to separate derivatives trading from units that get federal backing, according to a letter to the bank posted on the Federal Reserve website.

Bloomberg News reports that The Fed said in the letter that Goldman must determine whether to kill the swaps activity or move it to properly capitalized affiliates.

Under the Dodd-Frank Act rule requiring the swaps push-out, interest-rate and some credit swaps can still be traded inside the bank.

'The potential impact of granting a 24-month transition period is less adverse than the potential impact of denying the transition period', Robert Frierson, secretary of the board, wrote in the letter dated Wednesday. Giving Goldman Sachs the transition time lowers 'the probability of operational problems and market disruption', Frierson wrote.

Hit the link below to access the complete Bloomberg article:

Goldman Sachs Given Two-Year Phase-Out for Some Swaps Trades

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