Goldman breaks silence in illiquidity warnings

摘要

Goldman sachs has broken its usual silence on the impact of regulation, with president and chief operating officer Gary Cohn warning that the looming liquidity crisis is "a function of the regulatory world". "The cumulative effect of a variety of different regulations have had an impact on the liquidity of all markets including the fixed-income markets," Cohn said, adding that the combination of the Volcker Rule limiting proprietary trading and the Dodd-Frank Act has virtually eliminated the ability of broker dealers to commit their own capital to stabilise markets. Historically one of the most important roles of the broker dealer was to provide capital and stabilise markets when they got out of line, Cohn said. When there were too many buyers, broker dealers would step in and sell product, he said.