The Federal Reserve approved on Monday Goldman Sachs's take-over of the online deposit platform of GE Capital, rejecting worries it would reduce competition and make Goldman even more powerful. Approval of the deal announced last August will bring Goldman Sachs Bank $17 billion in deposits, from GE Capital Bank's total $18.2 billion in deposits.
It will also bring the Wall Street giant the technology to manage the online deposit-taking platform, currently run out of GE Capital Bank's single office in Holladay, Utah. Critics of the deal had said it would simply enlarge a bank already labelled systemically important, or "too big to fail". Others said it would reduce competition in the US banking industry. But the Fed said the addition of the large deposit base will strengthen Goldman Sachs Bank, which currently reports $78.1 billion in deposits against assets of $860 billion.
"This should enhance financial stability." In addition, with the two banks not competing directly in any market, the Fed and the Department of Justice, which governs antitrust matters, said the deal "would not likely have a significantly adverse effect on competition in any relevant banking market."
Comments
Comments are closed.