Goldman Sachs to buy GE Capital's US online deposits
Goldman Sachs Group Inc is buying GE Capital Bank's US online deposits, a move that will give the largest US investment bank a more stable source of funding to help it better weather future crises.
The deal is relatively small, giving Goldman Sachs $16 billion of deposits to help fund its $860 billion of assets. But it represents the latest step in a historic shift for Goldman, a standalone investment bank that has been forced by regulators to look more like a universal bank since the financial crisis.
Lehman Brothers and Bear Stearns faltered in 2008 after they could no longer borrow from bond investors and in other markets. Regulators have been pushing investment banks since then to mimic commercial and universal banks and fund more of their assets with deposits from consumers. In times of stress, deposits are less likely to disappear because they are federally insured.
Some officials at the Federal Reserve, for example, pressured Goldman Sachs to acquire retail bank Wachovia soon after Lehman's collapse.
Goldman Sachs considered buying online bank ING Direct, but Capital One Financial Corp bought it instead in 2011, according to a person familiar with the bank's plans.