When the financial crisis was setting in and Goldman Sachs and Morgan Stanley were transitioning to bank holding company status, the conventional wisdom was that both banks would move aggressively toward deposit, taking businesses to access a source of cheap funding.

A market analyst from RBC Capital Markets--initiative coverage of both banks with an underperform on both-- cited a lack of movement in this area as a negative particularly for Goldman Sachs, which has not made "significant strides" in this area. That situation isn't going to change anytime soon. While many expected Goldman Sachs to expand its wealth management operations, CEO Lloyd Blankfein has left no doubt that the bank is no longer interested in large-scale expansion.

"It's not happening," he told a Reuters reporter.

Plans to expand from relatively few offices up in the Northeast into Arizona, Florida and Atlanta are off the table, he said. Recall that it's brief foray in the consumer mortgage market ended badly with the recent sale of its Litton unit. This doesn't mean it's scaling back its current operations, which are built on a small staff of high-end advisors and a business that sells investment products to through external advisers and brokers. But that's about as far as the business will go.

For more:
- here's an article from Reuters
- here's a Forbes article about the RC Capital Markets report

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