Goldman Sachs, the Wall Street-listed investment banking giant, is creating an in-house private bank to serve wealthy customers around the world as it seeks to recalibrate its business.

Goldman Sachs, the Wall Street-listed investment banking
giant, is creating an in-house private bank to serve wealthy customers around
the world as it seeks to recalibrate its business, according to the Wall Street
Journal.

The bank is designed to boost Goldman Sachs’ deposits, which
is a relatively cheap source of funding and less vulnerable to movements in
financial markets, such as short-term money market rates, the article said.

The bank was not available for comment at the time that this
publication went to press. In the past, Goldman Sachs has been reticent about
any of its wealth management activities or goals when approached by WealthBriefing.

The report said the new unit will also lend more
directly to corporations, some of which already make investments and do
business with Goldman Sachs. Bank executives have set a goal of $100 billion in
loans, up from $12 billion at the end of March. The development, however, will
not involve any retail branches, Lloyd Blankfein, chief executive, told theWSJ.

Goldman converted into a bank holding company in 2008 to get
access to emergency funds from the Federal Reserve when the financial crisis
was at its height.

The firm remains best known for its role as an investment
bank. It has been caught in controversy for activities such as its role in
selling complex mortgage-linked securities to investors while taking advice, so
it was claimed, from John Paulson, the hedge fund manager who famously
predicted the collapse in the price of such securities. Goldman Sachs
executives have also featured prominently among people appointed to
high-profile roles in the US
government, such as Hank Paulson, former US Treasury Secretary in the George W
Bush era, and Robert Rubin, who held the same post in the Clinton administration.