Digital Bank Marcus, Part Of Goldman Sachs, Being Queried By Federal Reserve: Report


Marcus, the Goldman Sachs (NYSE:GS) owned digital bank serving consumers in both the US and the UK, is getting some scrutiny from the US Federal Reserve according to reports.

The Fed is one of several federal agencies that has regulatory oversight over banks. The Fed is responsible for “supervising-monitoring, inspecting, and examining” big banks to ensure they are in compliance, and operating safely. The Fed also reviews applications submitted by banks and has some enforcement authority for violations of rules or “unsafe and unsound activities.”

While Marcus may not be a systemically important financial institution, Goldman certainly is but it is curious as to what the Feds may be looking at, or what made it curious.

According to Bloomberg, unnamed sources report that management at Goldman has been questioned about Marcus by Fed officials for several weeks now. To quote the article:

“The review goes beyond the central bank’s regular oversight of the firm, and is distinct from its more frequent industrywide looks at business lines of interest. By zeroing in on Marcus, the central bank is taking stock of a division that’s relatively new and growing substantially inside a company without much history dealing with the general public.”

While the query could be much ado about nothing, and reflective of the Fed attempting to better understand digital banking, it is probably a hassle for Goldman during a challenging time as the economy is in recession and consumers are expected to pull back more sharply as inflation spikes. Meanwhile, Marcus has been losing money, typical for a startup, as it figures out the best equation to provide banking services to a sophisticated and digital-first population.





Read More: Digital Bank Marcus, Part Of Goldman Sachs, Being Queried By Federal Reserve: Report

2022-09-16 15:50:08

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