Congress, Fed helped save Goldman Sachs from Glencore fate

New York

IN October 2011, things were looking bleak at Goldman Sachs Group Inc's commodities business. Revenue was down, competition was up, employee attrition was at an all-time high and new regulations were on the horizon.

Beyond the usual rivalries with Morgan Stanley and JPMorgan Chase & Co, Goldman Sachs executives saw an upstart doing deals they couldn't do and throwing lots of cash at traders: Glencore plc. The commodities company wasn't tied down by rules that applied to banks and had become even more of a presence since a US$10 billion initial public offering earlier that year. It boasted strong growth and higher stock multiples than Goldman Sachs was receiving for its commodities unit.