Goldman Sachs to Become the Fourth Largest Bank Holding Company

    NEW YORK--(BUSINESS WIRE)--Sept. 21, 2008--The Goldman Sachs
Group, Inc. (NYSE: GS) today announced that it will become the fourth
largest Bank Holding Company and will be regulated by the Federal

    In recent weeks, particularly in view of market developments,
Goldman Sachs has discussed with the Federal Reserve our intention to
be regulated as a Bank Holding Company. We understand that the market
views oversight by the Federal Reserve and the ability to source
insured bank deposits as providing a greater degree of safety and
soundness. We view regulation by the Federal Reserve Board as
appropriate and in the best interests of protecting and growing our
franchise across our diverse range of businesses.

    Since the spring of this year, the Federal Reserve has been
reviewing our liquidity and funding profile, capital adequacy and
overall risk management framework. We are pleased that the Federal
Reserve recognizes the strength and health of our liquidity and
funding and the overall quality of our risk management. We have
maintained our Tier 1 capital levels well above the Federal Reserve's
"well-capitalized" threshold of 6 percent since these ratios were
first calculated in 2004. For the past several quarters, in light of
the difficult market environment, we have been reducing our risk
exposures and increasing our capitalization. Our Tier 1 capital ratio
at the end of the third quarter was 11.6 percent.

    "When Goldman Sachs was a private partnership, we made the
decision to become a public company, recognizing the need for
permanent capital to meet the demands of scale. While accelerated by
market sentiment, our decision to be regulated by the Federal Reserve
is based on the recognition that such regulation provides its members
with full prudential supervision and access to permanent liquidity and
funding," said Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs.
"We believe that Goldman Sachs, under Federal Reserve supervision,
will be regarded as an even more secure institution with an
exceptionally clean balance sheet and a greater diversity of funding

    Goldman Sachs already has two active deposit taking institutions -
Goldman Sachs Bank USA and Goldman Sachs Bank Europe PLC - which,
together, hold more than $20 billion in customer deposits. We are
moving assets from a number of strategic businesses, including our
lending businesses, into GS Bank USA. With over $150 billion in
assets, GS Bank USA will be one of the ten largest banks in the United
States. While these assets are fully funded for term, they also are
available to be funded by the Federal Reserve. We intend to grow our
deposit base through acquisitions and organically.

    Goldman Sachs is a leading global investment banking, securities
and investment management firm that provides a wide range of services
worldwide to a substantial and diversified client base that includes
corporations, financial institutions, governments and high net worth
individuals. Founded in 1869, it is one of the oldest and largest
investment banking firms. The firm is headquartered in New York and
maintains offices in London, Frankfurt, Tokyo, Hong Kong and other
major financial centers around the world.

    CONTACT: Media:
             Lucas van Praag, 212-902-5400
             Dane Holmes, 212-357-2674