Goldman fights to axe bank red tape

Millionaire bankers at Goldman Sachs are fighting to overturn rules designed to prevent another financial crisis.

If they succeed, it would free them up to make more money.

Bosses at the Wall Street giant saw Donald trump’s election as US President as a golden opportunity to water down protections for ordinary families after he pledged to scrap red tape – particularly the Dodd- Frank law brought in to shore up the financial system after the crash.

Goldman and other Wall Street bankers are pushing for a wave of deregulation in the US, which could be followed by calls in Britain for the City to follow suit or risk losing its competitive edge.

the bank spent £1.1m lobbying the US government for changes in the first half of this year alone.

Its sights are set on the so-called Volcker rule, which forbids bankers from gambling their firm’s cash on the markets, rather than just placing trades for clients.

this has led to a huge fall in trading revenue, from £12.6bn in 2007 to £5.9bn last year.

the bank’s boss Lloyd Blankfein – who earned £17.1m last year and has Goldman shares worth around £296m – has stepped up his criticism of the rule since trump’s election, calling it ‘very cumbersome’ this month. the DoddFrank reforms were designed to stop banks wrecking the economy again by forcing them to hold on to more cash so they can serve customers during a downturn, imposing annual tests of their financial strength, and creating a process so they can be shut down safely without a taxpayer rescue.

Many top bankers say the conditions are too harsh and would like the freedom to take bigger risks with customers’ cash.

A Goldman spokesman said: ‘As many regulators who implemented the rule conceded, now is an appropriate time to review it.’