Goldman Sachs will shut its 8-person Global Macro Proprietary Trading desk, according to The Wall Street Journal.  The group, which trades currencies, stocks and products tied to interest rates and other fixed- income markets, is part of Goldman’s fixed-income trading division.  Interestingly enough, Goldman relies on fixed income trading for the largest portion of its total revenues. In 2010, that division generated revenue of nearly $14 billion - or 35% of the firm’s total. 

Last year, Goldman shut down the equity prop-trading group, Goldman Sachs Principal Strategies, in response to the Volcker rule.  Pierre Henri Flamand, who had headed that group, retired from the firm to start his own hedge fund.

Morgan Stanley and JPMorgan Chase are among Wall Street firms breaking off or winding down such trading units to comply with Dodd-Frank's Volcker rule - which prohibits banks from betting capital for their own accounts.  The intent was to avert losses that might cause the collapse of firms and the financial system.

Morgan Stanley said last month it plans to break off its largest proprietary-trading group, Process Driven Trading, or PDT, as an independent advisory firm by the end of 2012.  The firm reportedly may also turn its Equity Trading Lab proprietary group into an electronic client-trading unit.  [Bloomberg, 2/15]