BUSINESS
08/04/2010 01:12 pm ET | Updated May 25, 2011

Goldman Sachs Makes Plans To Spin Off Proprietary Trading: CNBC

Goldman Sachs is "seriously considering spinning off its proprietary trading unit" according to CNBC's Kate Kelly. The group plans to do so to comply with the Volcker Rule, which bars banks from making certain speculative investments with their own money as opposed to a customer's. The rule is part of the financial reform legislation passed last month.

When news broke several prop traders were being moved to asset management at Goldman Sachs, our own Ryan Grim reported that "the law does allow firms to trade a small amount of taxpayer-backed capital for their own profit, fueling fears that banks would use the leeway to continue to trade large positions." He quoted a Democratic aide who advocated putting those fears aside, "the mere fact that the firms are putting people in asset management is a good sign, not a bad one. The talk about loopholes and weak Volcker Rule is really just uninformed."

We will be updating the story throughout the day.