Traders at Goldman Sachs recorded only one daily loss in the third quarter, highlighting the trading bonanza sweeping Wall Street as central banks continue to pump billions of dollars into the financial system.
The performance – revealed on Wednesday in a regulatory filing – compares with two losing trading days in the previous quarter and confirms that the authorities’ drive to revive markets after the crisis is yielding huge windfalls for some banks.
Before the crisis, banks regularly recorded trading losses on several days in a quarter.
Goldman made more than $100m in profits on 36 of the 65 days in the three months to September and recorded more than $50m in profit on more than eight out of 10 trading days, the filing shows.
These figures were down from the second quarter, when Goldman reported record trading revenues and had 46 days with $100m-plus in profits. The smaller number of days with $100m-plus profits in the third quarter partly reflects the bank’s decision to rein in risk-taking in areas such as interest rates and equities.
Goldman’s ability to reap large profits – its trading operations had net income of $6bn during the third quarter – without ramping up risk underlines the changing nature of trading on Wall Street.
In depth: US banks
News and analysis on the progress of US banks in the wake of the global economic crisis
After taking large bets with their own capital prior to the crisis, several banks have now taken advantage of reduced competition, higher margins and government-provided liquidity to make money in less risky activities. Goldman doubled its trading profits in credit from $1bn in the second quarter to $2bn in the third quarter and also increased profits in equities by about 25 per cent to $3.4bn, according to the filing.
The firm, which last year had to become a bank holding company to access government funds, lost $3.6bn in currency trading in the third quarter, more than twice its loss in the previous period. However, that figure is volatile because it includes positions used to hedge currency exposure across Goldman’s portfolio.
Trading in the US fixed-income market this year has been dominated by the Federal Reserve, which recently finished buying a planned $300bn in Treasury debt, and is on track to complete buying $1,250bn of mortgage securities by the end of March. These purchases have helped keep market rates low and also normalised the relationship between government bonds and other fixed-income securities.
Dealers say banks have made big profits by the timing of Fed purchases of government debt and subsequent Treasury debt sales, and by betting that the relationship between Treasury bonds and other fixed-income securities would normalise.

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