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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Wednesday, August 1, 2012

The Ubiquity of Goldman Sachs

Wherever there is a Goldman Sachs guy at work, you will find conflicts of interest.  Conflicts are endemic to Goldman Sachs.  As Blankfein says:  "no one who's going to be effective in this business can avoid conflicts of interest coming up."

Conflicts of interest make Goldman good at what it does--making large amounts of money for itself and pushing past the threshold of legality.  If "conflicts of interest" have to be "managed" then we should make absolutely sure that no Goldman guy every attains a position where the public needs are to be served.

Mirabile Dictu!  ECB Chief Draghi Being Investigated for Membership in the Group of Thirty
By Yves Smith - Naked Capitalism
. . . .
And ex banking, that actually is true in most advanced economies. But as a reminder of how backs get scratched in Europe, we have Mario Draghi. The former head of the Bank of Italy, now ECB chairman, was responsible for European operations for Goldman from 2002 to 2005, and predictably has no memory of the currency swaps deal that enabled Greece to camouflage the size of its budget deficit. The new contretemps involves his membership in the Group of Thirty (aka G30), which despite its grand claims, is a bank lobbying group, even as he is serving as the head of the ECB. An alert reader pointed me to the story in Der Spiegel (German version only) and Google translate does a serviceable job.

The inquiry was set in motion by Corporate Observatory Europe, which is an anti-lobbying group. From a recent article on its website:
Industry experts and corporate lobbyists have effectively captured key areas of policy advice within the European Commission, according to new research carried out by the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU) which finds that two thirds of DG Enterprise and Industry’s advisory groups are dominated by corporate representatives.
The Der Spiegel piece provides an overview of the G30 and highlights that bank executives play prominent roles. Per the Google translation:
The International Banking Seminar of the Group of Thirty (G30) is held every year to coincide with the fall meeting of the International Monetary Fund (IMF) and World Bank, and is accessible only to selected visitors. Behind the G30 hides a group of leading bankers and economists who wish to make claims to influence decisions in the financial sector. Prominent members include senior representatives of Goldman Sachs, Morgan Stanley and JPMorgan Chase International and former and current heads of central banks.
The original complaint contended that given the ECB’s role in bank regulation, having anyone in an executive capacity, let alone its chief, represented a serious conflict of interest. The EU Ombudsman thinks the charge has enough meat to warrant an investigation:

Read the whole article here


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