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Goldman's Next Challenge

Now that Goldman has received the green light to pay back TARP, the firm's next hurdle is losing the commercial bank holding company status. While Goldman's overall model has not changed much since it became a commercial bank in September, it is subject to additional supervision and regulations that constrain profitability.

With the worst of the financial crisis seemingly over, the benefits of being a bank holding company are outweighed by the restrictions and conditions, said Tom Sowanick, the chief investment officer of Princeton, New Jersey-based Clearbrook Financial LLC.
Since Goldman became a commercial bank, industry watchers have said the change would expose the firm to stringent capital requirements, dampening its ability to use borrowed money to boost profits for its lucrative proprietary trading business.

It is going to be a long road back to the point where regulators have some degree of trust in large firms to not blow up themselves or the banking system. Given all the GS favoritism conspiracy theories in DC, allowing them in particular to crank up the leverage again seems unlikely.
Goldman could shed "commercial bank" charter [Reuters]