Goldman Sachs is considered Wall Street’s premier trading firm, yet they are planning to outsource their traders, sales people and investment bankers to Singapore and India because of the Dodd-Frank financial “reform” law. According to Davis Polk Law Firm’s count, the act requires 243 new laws, 67 one-time reports/ studies, and 22 new periodic reports.
Although all the regulations have not yet been finalized, they will definitely raise business costs for big banks. To counteract these regulations, banks are choosing countries with lower taxes and less regulations, as well as places with a well-educated and English-speaking workforce.
Goldman plans to expand their Singapore office by 1000 employees while simultaneously downsizing here in New York by a minimum of 230 jobs. Goldman isn’t the only major US bank to weigh outsourcing as an option. Bank such as Citigroup, Bank of America, Morgan Stanley and JP Morgan have all begun to develop a stronger presence outside of America.
This growing trend has caused concern and even panic as companies downsize and move overseas. Yes, the transition results in job-loss here in the US, but in terms of the money Richard Bove argues that nothing has changed.
“Everyone is screaming that the money is now overseas,” said the veteran market analyst. “Well it’s overseas in American banks. What we are seeing is an escape from US regulation.”