Goldman released Lloyd Blankfein’s statement ahead of his hearing tomorrow in front of the Senate.
Here are the key points.
- We and other banks, rating agencies and regulators failed to sound the alarm that there was too much lending and too much leverage in the system — that credit had become too cheap.
- Goldman supports clearinghouses for eligible derivatives and higher capital requirements for non-standard instruments.
- April 16, the day the SEC announced the charges against Goldman, “was one of the worst days in my professional life, as I know it was for every person at our firm.”
- While we strongly disagree with the SEC’s complaint, I also recognise how such a complicated transaction may look to many people. We have to do a better job of striking the balance between what an informed client believes is important to his or her investing goals and what the public believes is overly complex and risky.
- Our risk management processes did not, and could not, provide absolute clarity; that uncertainty dictated our decision to attempt to reduce the firm’s overall risk.
- We didn’t have a massive short against the housing market and we certainly did not bet against our clients. (Read our summary of the Goldman emails to see how this is true.)
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