Say, aren't Goldman the fellows that just pled to fraudulent dealing in financial instruments like MBS, and paid a fairly hefty 500+ million dollar fine? The company is starting a centralized clearing facility for derivatives, which may be among those mandated for use by market participants, in the US government mandated efforts to reform.
When one considers the information available to a central clearing facility, somewhat like an exchange, it does give one pause to have the owner of that facility as a somewhat notorious and aggressive market participant with a known penchant for exploiting information for its own ends.
Financial reform and change you can believe in. It pays to have friends in high places.
Economic Policy Journal
If Regulators Say Trade Through a Central Exchange...
By Robert Wenzel
...Goldman Sachs starts a central exchange.
Is it me, or does it just seem that whatever the rules or regulations, Goldman comes out on top and pretty much ends up running the show?
Regulators are preparing rules that will require the majority of privately traded derivatives be cleared through central counterparties.
Goldman Sachs announced today the launch of its Derivatives Clearing Services (DCS) business. The DCS will provide clients with a comprehensive global OTC clearing service for interest rates, credit, foreign exchange, equities and commodities, says Goldman.
“In partnership with our clients, regulators and multiple clearing venues, we are committed to improving market structure for derivatives,” said Michael Dawley, Managing Director and Co-Head of Futures and DCS, Goldman Sachs. “The DCS offering provides our clients with a host of value-added services and multi-product expertise to successfully navigate this dynamically changing environment.”
According to a press release,Goldman Sachs said it recognizes that clients will be faced with new reporting, connectivity, and regulatory requirements. The firm is committed to investing in innovative solutions to help clients address these changes.
“The move to central clearing for OTC derivatives is a significant turning point in the marketplace," said Jack McCabe, Managing Director and Co-Head of Futures and DCS at Goldman Sachs. “Our strong trading franchise, coupled with our market leading futures and prime brokerage services, enables us to provide our clients with the foundation they need to adapt to these important industry developments."
