Editor’s Note: Goldman wants to pay back its $10 billion TARP loan and therefore avoid government restrictions. But by electing to be a “systematically important financial firm” to avail itself of government guarantees as well as using the Federal Deposit Insurance Corporation to back $28 billion in bonds it seems Goldman wants to have it cake and eat it. Today’s Op Ed piece in the Financial Times highlights what they are trying to do. – by RG
“Don’t set Goldman Sachs free, Mr Geithner”
By John Gapper
Published: April 15 2009 in the Financial Times
Should Tim Geithner let Lloyd Blankfein escape?
Mr Blankfein, the chairman and chief executive of Goldman Sachs, is eager for his institution to become the first big bank to shake off the stifling embrace of the US government. Mr Geithner, the US Treasury secretary, must decide whether to let him.
. . .
There are obvious political risks in letting Goldman roam free while other banks remain bound by the troubled asset relief programme (Tarp). It would exacerbate suspicions that Goldman, with its long history of producing Treasury secretaries, gets special treatment. These were not soothed by the decision to pay off all Goldman’s credit default swaps with American International Group, now controlled by the state.
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