Mea Culpa from Goldman Sachs

In: Commentary Finance Source: FT Stock Market US Economy

9 Feb 2009

No charts. Just a decent letter from CEO Lloyd Blankfein to the FT on mistakes and lessons. Excerpts:

.This over-dependence on credit ratings coincided with the dilution of the coveted triple A rating. In January 2008, there were 12 triple A-rated companies in the world. At the same time, there were 64,000 structured finance instruments, such as collateralised debt obligations, rated triple A. It is easy and appropriate to blame the rating agencies for lapses in their credit judgments. But the blame for the result is not theirs alone. Every financial institution that participated in the process has to accept its share of the responsibility.

.For policymakers and regulators, it should be clear that self-regulation has its limits. We rationalised and justified the downward pricing of risk on the grounds that it was different. We did so because our self-interest in preserving and expanding our market share, as competitors, sometimes blinds us – especially when exuberance is at its peak. At the very least, fixing a system-wide problem, elevating standards or driving the industry to a collective response requires effective central regulation and the convening power of regulators..

Comment Form

What is Chart Porn?

An addictive collection of beautiful charts, graphs, maps, and interactive data visualization toys -- on topics from around the world.

  • Harde Schijf Recovery: Pizza! :D I never would have guessed that a smaller pizza is THAT MUCH smaller! So: great for wat [...]
  • Clyde: Those f'ing AdviceAnimals. Oneliner jokes superimposed onto an unnecessary picture. Whenever I do a [...]
  • Will Reinhardt: I had no idea that China was all in one timezone, that’s crazy to me. If you walk from China to Pa [...]
  • Coffey: Not to mean but the theory that Christianity is the one and only true religion is questionable. I s [...]
  • Drumwaster: Good thing we have these snapshots, otherwise I'd have to rely on NASA for such data, and what do th [...]