We would be a lot clearer about what these new standards meant if we were just reminded of what the old standards were. Under the old standards we find the following description from Carl Levin as reported in Forbes magazine by Halah Touryalai in 2012:
“Using emails, memos and other internal documents, this report tells the inside story of an economic assault that cost millions of Americans their jobs and homes, while wiping out investors, good businesses, and markets,” said Levin. “High risk lending, regulatory failures, inflated credit ratings, and Wall Street firms engaging in massive conflicts of interest, contaminated the U.S. financial system with toxic mortgages and undermined public trust in U.S. markets. Using their own words in documents subpoenaed by the Subcommittee, the report discloses how financial firms deliberately took advantage of their clients and investors, how credit rating agencies assigned AAA ratings to high risk securities, and how regulators sat on their hands instead of reining in the unsafe and unsound practices all around them. Rampant conflicts of interest are the threads that run through every chapter of this sordid story.” (quotation from Carl Levin in The Real problem At Goldman Sachs? You, The Muppet Client by Halah Touryalai in Forbes)We could believe that Goldman Sachs is now taking on new ethical standards if they even mentioned how they would change the old unethical standards used before the financial crisis. When a bank does not have to even admit wrongdoing, why in the world would they stop doing wrong ? The whole effort by Goldman is really a public relations exercise that investors will probably believe but we don't.
Let's examine another new standard toward Conflicts of Interest also listed on page 3. We would need a whole book to just list the conflicts of interest that Goldman has subsumed into its dealings. For every Goldman Sachs guy that is or has been in government service, there is a potential for conflict of interest because what Goldman Sachs strives for (big profit) is not what is best for the public. Every person from Goldman serving in government is potentially in a conflict of interest starting with Robert Rubin, Mark Carney, Jon Corzine, Hank Paulson, Bill Dudley, Stephen Friedman, Gary Gensler, Robert Hormats, Neel Kashkari, Mark Patterson, etc. See other names listed here.
How can conflicts of interest be dealt with when the conflict lies with real people doing real things in the service of the public when their own standards are at variance with the needs of the public?