With the Federal Reserve busily drafting rules to limit pay for bank executives, some investors believe Goldman Sachs will simply stop being a bank, Reuters reports. By shedding its year-old commercial banking charter, acquired in the heat of the financial meltdown to ensure access to credit, Goldman could elude restrictions in the offing. But Goldman is so big that regulators are unlikely to let it slip away from Fed oversight without a fight.
Goldman isn't saying anything about dropping the charter. “Fed is our supervising regulator, and we have no plans for that to change,” says a spokesman. But the bank has been quick to put distance between it and the government, paying back its $10 billion in bailout funds in June, and analysts see a fight brewing over compensation. In the first half of 2009, Goldman set aside $11.3 billion for bonuses, roughly half its revenues. “It is going to be a huge issue,” says one ex-regulator, “given all the history.”