Goldman Sachs Group, Inc. (GS) Earnings Set to Soar

Still, the big threat to Goldman Sachs Group, Inc. (NYSE:GS) remains regulation, and it appears that under new standards from the FDIC and the Federal Reserve, the bank will have to take steps to shore up its capital reserves even further. With calls to raise capital-to-asset ratios to 6% for the most systemically important financial institutions, both Goldman and peer Morgan Stanley (NYSE:MS) will have to increase their capital positions, along with several retail banks. Those standards could make smaller players on Wall Street more attractive, as they’d be able to use greater leverage to take advantage of profitable opportunities.

In Goldman Sachs Group, Inc. (NYSE:GS)’s report, watch to see how CEO Lloyd Blankfein moves forward in applying his economically optimistic attitude toward the company’s business. Moreover, pay particular attention to the impact of higher interest rates on Goldman Sachs earnings, as rates could continue to rise if the Fed begins slowly to ease off on its stimulative monetary policy going forward.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Ebix and Goldman Sachs.

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