Latest banking news

Goldman Sachs may eliminate as many as 4,000 employees, according to a person familiar with the matter. Top managers have been asked to identify potential cost-reduction targets, and no final job-cut number has been determined, the person said, asking not to be identified discussing internal deliberations. Headcount at the Wall Street giant has surged in recent years as CEO David Solomon completed acquisitions to build a more diversified company. A costly expansion into consumer banking left the unit with its deepest losses yet amid a slowdown in the business environment for dealmaking and slumping asset prices.
The bank's workforce surpassed 49,000 in this year's third quarter, up 34% since the end of 2018. Solomon has said he's dialing back the firm's ambitions for consumer banking and signaled he's reviewing other business lines to manage headcount and limit costs. The latest cuts go beyond the firm's annual exercise of weeding out underperforming staff, which was the focus just months ago. Semafor, which reported the potential job cuts earlier Friday, said they may amount to up to 8% of the bank's workforce. A spokesperson for the New York-based company declined to comment. — Sridhar Natarajan and Steve Dickson, Bloomberg News

The investment fund created last year by the Federal Deposit Insurance Corp. to support minority depository institutions and community development financial institutions officially launched this week with the naming of two fund managers. Anchor investors Microsoft and Truist Financial appointed Elizabeth Park Capital Management, an alternative asset manager in Cleveland, and Calvart Impact, an investment firm in Bethesda, Maryland, to co-manage the fund, which will provide capital, market development and other technical support services to mission-driven banks. The fund, which was announced in September 2021, will focus on about 300 mission-driven U.S. banks that make loans in historically unbanked and rural communities and communities of color. The fund has secured $120 million of commitments to date, with a target goal of $500 million to $1 billion. In addition to Microsoft and Truist, Warner Bros. Discovery has made a commitment to the fund, which expects to start making investments after the first fundraising close, which is anticipated to take place during the second quarter of 2023. — Allissa Kline

FTX described its "robust" security practices and advocated against stricter safeguards on client assets in a letter to the Australian government a little more than five months before the cryptocurrency exchange collapsed. Crypto firms shouldn't be forced to keep clients assets locally or using a third-party firm, FTX wrote in a submission to the nation's Treasury department dated May 29 that was recently made public. "Larger more sophisticated groups such as FTX have invested significant sums in developing robust security practices which achieve the necessary levels of security while keeping custody of assets 'in-house,' " according to the document. FTX's implosion last month came after the exchange had wooed regulators worldwide for years. Founder Sam Bankman-Fried, who was arrested in the Bahamas on Monday, had testified before the US Congress and had been active in the debate over whether the crypto space should be more tightly regulated. The assertions in the Australian letter are at odds with the assessment of new FTX CEO John J. Ray III, who said recently that the exchange had "absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals." "By providing regulatory certainty, consumers can be confident that they are dealing with legitimate businesses and that their consumer rights can be enforced," FTX said in the Australian letter. "Likewise, a clear regulatory regime will provide greater business certainty." The Australian Financial Review reported earlier on the letter. — Joanna Ossinger and Ben Westcott, Bloomberg News, with assistance from Victoria Batchelor.