[ by Melanie Gretchen ]

Goldman Sachs is cutting costs amid new regulations and a struggling market.  To this end, the New York-based firm has shifted its focus to technology,  CEO Lloyd Blankfein said at the Bank of America Merrill Lynch Banking & Financial Services Conference in Manhattan on Tuesday.

Here's how Goldman has streamlined its investment firm so far:

• 60 to 70% of shares are now traded through "low-touch" channels, without the direct involvement of people
• electronic execution accounts for significant portions of activity in the firm's cash fixed-income business

"For the first time, it's clear that size and complexity come with a higher cost," Mr. Blankfein said.  "The firm's highs should be lower and lows should be higher."

What's forcing Goldman's hand:

• the new Basel rules, which would compel big financial institutions to hold more capital against their assets
• the Volcker Rule, which would limit the bank's ability to trade with its own money

So far, the bank is taking the new landscape in stride.  Goldman reported a profit in Q3, with earnings of $1.46 billion, or $2.85 a share.  The influx of new clients has continued.

Nevertheless, Mr. Blankfein on Tuesday remained cautious.

"We're barely able to predict the present.  The markets will be roiled, and then the markets will be relieved.  We are at least braced for a ride."

For further details, go to [Dealbook, 11/13/12].