Goldman Sachs expected to announce accounting changes
Stock prices whiz by on a ticker near the Goldman Sachs booth on the floor of the New York Stock Exchange in New York.
TEXT OF INTERVIEW
JEREMY HOBSON: Today the investment bank Goldman Sachs will announce 39 accounting changes to disclose how it deals with clients and how it makes money through its own investments. Why would the ultra secret Wall Street institution do such a thing?
Well, let's go live to our Washington Bureau Chief John Dimsdale for answers. Good Morning, John.
HOBSON: So what's this all about?
DIMSDALE: Goldman came under congressional and regulatory scrutiny last year for selling investments in subprime mortgages that were almost certain to lose money and in fact Goldman itself was secretly betting its own money they would fail. They settled a fraud suit with securities regulators for half a billion dollars. So here's a huge successful bank that benefited from taxpayer bailout but also took advantage of its clients. Goldman is trying to clean up its battered reputation.
HOBSON: Trying to clean up its reputation, and what do these accounting changes do, John?
DIMSDALE: They're separate out the trading and investing it does with its own money to show how much the bank earns there, as opposed to how much profit comes from trading its clients money. There will be new conflict of interest rules that require more disclosure of how Goldman is betting its own money when it markets investments to customers. And the power of Goldman's trading desks which put together those toxic assets that were sold to the public as investments, they're going to be reined in.
HOBSON: Well I'm sure there will be a lot of people looking closely to see what Goldman tells us. Marketplace's John Dimsdale in Washington, thanks.
DIMSDALE: Thanks Jeremy.