Goldman's Stonewall Is Bad Business
By hiding information from regulators and customers, the bank is hurting its already-damaged reputation.
Goldman Sachs (GS) has always had a reputation for being above the fray, aloof from the concerns of mere mortals. This reputation has served the bank splendidly as it fends off the pleas, hearings, and subpoenas of federal regulators. To the experienced (or simply jaded), it appeared that the 141-year-old Wall Street stalwart is just, well, being Goldman.
This reputation has, unfortunately, served the bank a little too well. There is a point at which Goldman's stubborn refusal to descend from Mount Olympus is no longer just "Goldman being Goldman," but an actual sign of pathology in its operations. The bank has failed to realize that the world has changed, and it has a different, necessarily more accountable role now in the wider financial culture in the United States, which has had the leveling effect of wiping out Goldman's longtime exceptionalism. Rather than appearing aloof, Goldman's refusal to communicate with the rest of society now looks furtive and guilty—a fact easily ascertained by the stock's new dip to a 52-week low on Thursday. The only way for the bank to repair this is by genuinely embracing transparency and accepting the questions of Congress and the public with good faith rather than open contempt.
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