- The Fed is concerned that it didn’t have sufficient monitoring and control mechanisms.
- The inquiry would encompass “Goldman’s compliance functions, as well as audit and legal.”
The Federal Reserve, according to the WSJ, has begun looking into Goldman Sachs. The publication claims the investigation is focused on whether or not the bank “ramped up consumer lending” with adequate protections in place.
It’s no exaggeration to say that Goldman Sachs Group Inc. is among the world’s most prestigious. And successful banking and investing institutions. While the company was expanding rapidly. The Fed became concerned that it didn’t have sufficient monitoring and control mechanisms within the consumer business, known as Marcus.
Furthermore, the publication states that the Fed is conducting the investigation to see whether or not Marcus has “appropriate oversight.” Furthermore, it was said that sources familiar with the case said the probe found evidence of possible “management or governance problems” in the consumer industry sector.
Moreover, the Federal Reserve review will also look at whether or not procedures were followed when customers were harmed. Whether or not these problems were “flagged internally” and whether or not they were effectively remedied, as stated in the report.
Aside from that, the report indicated that the inquiry would encompass “Goldman’s compliance functions, as well as audit and legal.” This comes after several reports from Bloomberg said the Fed was already investigating Goldman Sachs’ consumer division.
According to the WSJ, Goldman Sachs is shrinking its consumer business. According to reports, this change is part of a “broader reshuffling” inside the company. In reaction to the event, CEO David Solomon said, “we tried to do too much too quickly.”