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Goldman Sachs Closes UK Savings Platform To New Clients

Tom Burroughes Group Editor 10 June 2020

Goldman Sachs Closes UK Savings Platform To New Clients

The savings product, introduced by the US firm two years ago in the UK, must be capped at a certain level to avoid the firm falling foul of the "ring-fencing" rules introduced to bolster the financial system after the 2008 financial crash.

Goldman Sachs yesterday confirmed that it is shutting savings in the UK to new clients from today because surging deposits came near regulatory caps amidst the COVID-19 crisis.

The US investment bank and wealth manager has broken away from its traditional business stamping ground in recent years with a digital bank called Marcus. The offering, which claims to give market-leading rates to savers, has attracted around £21 billion ($26.8 billion) from more than 500,000 savers since launching in the UK in 2018.

“We are temporarily not accepting new applications for our Marcus online savings account in order to manage our rate of deposit growth. This step will allow us to continue providing great value to our existing customers. We remain committed to expanding our UK retail business in future,” managing director of Marcus by Goldman Sachs, Des McDaid, said.

“Our existing customers are unaffected by this change. They are still able to manage their accounts and contact us as normal. New and existing customers can also continue to open our 1 Year Fixed Rate Saver,” the said. 

UK banking regulations, requiring retail deposits to be “ring-fenced”, have caused Goldman Sachs to manage growth. (“Ring-fencing” was introduced in the aftermath of the 2008 financial crisis, as a way to avoid the need for future costly tax-funded bailouts of retail banks if they hit trouble.) Ring-fencing would require Marcus in the UK to become a separate legal entity with its own board and limit how much capital it could share with the rest of Goldman’s businesses.

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