Goldman’s Gerald Corrigan: Best Defense is Good Offense
Posted by Larry Doyle on February 23, 2010 11:15 AM |
$300 million is a lot of money.
Was it enough for the preeminent firm on Wall Street, Goldman Sachs, to risk its reputation? Apparently it was because that is the reported figure Goldman earned from transactions it structured and executed with the nation of Greece to help hide that nation’s fiscal woes. I do not discount that Goldman took risk in these transactions, but $300 million is a lot of money.
Believe me, every firm on Wall Street would sell its soul for a lot less than that. Goldman Sachs was not the only firm on Wall Street to enter into derivative transactions with Greece or other nations to cover declining fiscal positions. Goldman is merely the highest profile firm.
What does a firm like Goldman do now that it is being besieged by regulators, central bankers, and national leaders, primarily Angela Merkel of Germany, for structuring and executing these transactions?
I see exactly this happening in reading the Financial Times’ report, Goldman Heads Off Criticism:
A senior Goldman Sachs banker has conceded that complex currency swaps used to reduce Greece’s budget deficit “could have and should have” been more transparent, as the investment bank moved to head off mounting criticism of the deals.
Goldman is under fire from European regulators and politicians for structuring a series of transactions that helped Greece to trim its national debt figures in 2001, just after it was admitted to Europe’s monetary union.
Gerald Corrigan, a former president of the Federal Reserve Bank of New York who joined Goldman in 1994, told a UK parliamentary committee that “with the benefit of hindsight . . . the standards of transparency could have been and probably should have been higher”.
Hindsight is always 20-20.
Funny how Corrigan, a former Fed President, decides to openly criticize his own firm. You think he is doing that of his own accord? Don’t be so naive.
Public statements of this sort dealing with issues this sensitive are totally orchestrated on Wall Street. Corrigan is utilizing the tried and true approach that ‘the best defense is a good offense.’
Corrigan’s statement is nothing more than an admission on Goldman’s part that it should have been more transparent in these transactions with Greece.
Who in the media or in Washington will have the balls to call Goldman out and ask them where, when, why and how they have not been transparent elsewhere.
“Lloyd, raise your right hand and repeat after me….”