Goldman Sachs may risk merchant banking revenue loss caused by Federal Reserve restriction proposal

According to Evercore ISI, Goldman could lose between USD 115 million and USD 2.7 billion, from ban on physical commodities activities to balance-sheet investments. Goldman has remained a bigger player in both areas than rivals since the financial crisis, wsj.com reports.

About one-quarter of Goldman’s roughly USD 100 billion investment book is equity, according to a November 2015 presentation. Most of it is in private companies, which carry higher risks than publicly traded stocks. Goldman has been an active investor in early-stage technology companies including Uber Technologies, Pinterest and Dropbox.

Goldman’s investing and lending segment, which includes its merchant-banking equity stakes and a much-larger loan book, has earned USD 1.2 billion in Q2 2016.

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