From the Washington Post entitled
Goldman Sachs fights back against claims of toxic environment
Quote:
Blankfein disputed his former employee’s description of the firm's culture.
In a letter to his staff, the chief executive wrote, "We were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients."
Before the recession, Goldman enjoyed a near-pristine image, and its top executives such as Henry M. Paulson, Robert Rubin and Jon S. Corzine moved easily into prominent government posts after leaving the firm. But the financial crisis blemished that reputation, and this episode marks another challenge to restoring it.
The dust-up comes as federal regulators gear up to forge the final terms of the so-called Volcker Rule, a policy that could ultimately cost Goldman Sachs and other investment banks billions of dollars.
The criticism could also raise questions about what kind of leader Blankfein has been since taking the helm of the Wall Street firm in 2006. ...
Goldman Sachs is not the only Wall Street institution that has been the target of vitriol in the wake of the 2008 financial crisis.
"This issue has been kind of swirling around the news and it's an issue that has been facing the financial industry for years," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "This is a conflict of short-term profits against longer-term goals."
In recent years, Goldman Sachs has had to gird itself against other harsh accusations of corporate greed. In a 2010 Rolling Stone article, journalist Matt Taibbi famously described the investment bank as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
Sen. Carl Levin (D-Mich.) described Goldman Sachs as a "financial snake pit" last year after he led a panel that examined the origins of the 2008 crisis.
Chief executive Lloyd Blankfein drew criticism in November 2009 after he told the British newspaper the Times that he was "doing God's work" at Goldman.
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The Volcker Rule was originally proposed to restrict United States banks from making speculative investments that do not benefit their customers. Widely acknowledged is that speculative activity help create the recession we have today by enriching financial institutions at the expense of the economy. In essence, the rule is a ban on proprietary trading by commercial banks, where deposits are used to trade on the bank's personal accounts.
This problem was why Glass Stegall was created after 1929 banks did this same sort of fiscal shenanigans to create the same fiscal disaster. Glass Stegall was virtually eliminated in the early 2000s when financial institutions claimed regulations were harmful to the economy.
Guess who got it completely wrong. Financial institutions can never be over-regulated. Greg Smith’s Op-Ed in the NY Times only confirms what is obvious.