Business

Goldman Sachs Schemes To Take Out Key Obama-Era Rule

Goldman Sachs is looking to leverage its influence with President Donald Trump’s administration to get rid of a key Obama-era regulation that limits how Wall Street firms trade and invest their own money.

The regulation is known as the Volcker Rule, and it was enacted as an attempt to prohibit banks from conducting certain types of investments that contributed to the Great Recession. The rule is part of the backbone of former President Barack Obama’s Dodd-Frank Act, but is hated unanimously by major banks that believe it’s burdensome and overly complex.

Goldman has two former top executives in the Trump administration–National Economic Council Director Gary Cohn and Treasury Secretary Steve Mnuchin–and has spent $1.4 million lobbying against the Volcker Rule in 2017, The Financial Times reported Tuesday.

The bank has seen some serious hits to revenue from its bonds, commodities, and currencies trading over the past 10 years. Goldman made $16.2 billion in revenue off said trades in 2007. Nearly 10 years later, in 2016, the bank’s revenues from bonds, commodities, and currencies trades fell to $7.6 billion.

Goldman’s CEO Lloyd Blankfein described the Volcker Rule in early August as “very cumbersome” and “very hard” to navigate. Blankfein characterized the rule as limiting progress, “it makes people sitting on trading desks very, very nervous.”

Goldman is not alone in its campaign for deregulation. Citigroup, JPMorgan Chase, and Morgan Stanley have each doled out over $1 million to lobby Washington.

One potential roadblock for Goldman and other banks lobbying for deregulation: Congress must be the body to repeal the Volcker Rule. Goldman could lobby to get congressmen to add changes to the rule in the end of the year spending bill, but the feasibility of that remains to be seen. Some members, like Sen. Elizabeth Warren of Massachusetts, believe the Obama-era regulations try to constrain Wall Street and protect ordinary American consumers.

The Trump administration, Goldman Sachs and other major banks have one thing in common: a mission to substantially deregulate the American economy.

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