When you talk to people on
Wall Street about making 600 million
dollars in three bond deals
everybody scoffs at this.
This is an insane amount of money
to make on bond deals that are
supposedly fairly plain vanilla.
At the very highest levels of the
company, maybe if they didn't know
what 1MBD was perhaps something
suspicious about that, well maybe
they should have dug a little harder
and maybe they should have found
The investigation into the firm's culpability
is ongoing as of April
2019. Goldman Sachs told CNBC "senior
management was unaware of the
criminal activity by Mr.
Leissner and his associate who
took extraordinary efforts to hide
their part in the illegal scheme.
Despite the legal issues Goldman's
advisory business still crushes
its competitors on Wall Street but
its trading business has lagged.
So Goldman Sachs has gone
from great to good.
Look at the first decade
versus the second decade.
They were number one in trading and
then they went to number three in
The lead has narrowed somewhat and
the stock price the valuation is
the lowest that it's been since they've
been a public company in a
non crisis period.
All of this has prompted one of
the most interesting pivots in Wall
But if you think about the
brand and the way the regulatory
environment has changed who we are, it
makes sense for us to have
In 2016, the company launched
a new product called Marcus.
It's a digital bank that provides
personal loans and high yield
What is it that Goldman is offering
in their bank account that I
can't get elsewhere?
It's that slightly
higher savings rate.
The pitch is
we are you know we are a
new bank we're a new approach.
We're not gonna nickel and
dime you on fees.
We're going to be very transparent.
We're going to be very clear to
you about how we make money.
And this is sort of a new
way of doing fintech these days.
To be clear, this is still a
tiny part of Goldman's overall business
but the trend of investment banks
starting to look more like
commercial banks is real.
In a post financial crisis
world, diversification is important.
Goldman said it had 46 billion
dollars in online retail deposits
across the U.S.
and the U.K..
That's pocket change compared to competitors
like Bank of America or
JP Morgan with more than a
trillion dollars in deposits each.
But it's seen as
a growth opportunity.
See, none of this is going
to fundamentally change Goldman Sachs who
we are, how we're making money in the
short term, but we think we can
build very successful platforms that over
time will make a meaningful
Goldman Sachs is going from Wall Street
to Main Street and look at how
they're doing this they're doing this
with more technology more like Silicon Valley.
Today, we're introducing a brand new
service and we call it Apple card.
There was an opportunity that I think
Apple saw and we saw to redesign
certain aspects of the credit card.
They're doing this with
a younger workforce.
Three fourths are
millennials or younger.
They're doing this with a more
relaxed dress code and they're doing
this with a CEO who
is a part time DJ.
Look, the jury is out on
the effectiveness of this new path.
A lot of us are watching.
If history is any guide Goldman Sachs
will find a way to make money.
Goldman Sachs, the Wall Street investment bank, has a storied history. Founded by Marcus Goldman 150 years ago, his son Henry revolutionized the industry with company valuations and IPOs. It was the gold standard in investment banking for decades and partners got rich when the company went public. But the firm's reputation took a beating during the financial crisis, eventually leading to one of the most interesting pivots in Wall Street history.
» Subscribe to CNBC: http://cnb.cx/SubscribeCNBC » Subscribe to CNBC TV: http://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC Classic: http://cnb.cx/SubscribeCNBCclassic
About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC
How Goldman Sachs Became Wall Street's Most Powerful Investment Bank