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Goldman Sachs Doesn't See Anything In The Volcker Rule That Prevents The Bank From Making Principal Investments With Its Own Money

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The rest of the market thought otherwise but Goldman has another interpretation.

Goldman will continue making principal investments with the firm’s own money because executives don’t think the so-called Volcker rule prevents the practice, a Bank of America Corp. analyst said. The analyst, Guy Moszkowski, published a note to investors today after meeting last week with four Goldman Sachs executives in Hong Kong. New York-based Goldman Sachs doesn’t think U.S. legislation passed last year that bans proprietary trading and limits holdings in hedge funds and private-equity funds precludes buying stakes in companies and other assets, Moszkowski wrote.

“The market interpretation of Volcker rules is that this will be off-limits ahead, but GS believes that many such investments will remain permissible, and will be closing on a ‘meaningful’ one in China shortly,” Moszkowski’s note said.

The investment is in Taikang Life Insurance, with a 12.02 percent stake. Thank you, Pedro!

Goldman Sachs Still Planning Principal Investments [Bloomberg]