Goldman Sachs expected to announce accounting changes

John Dimsdale Jan 11, 2011
HTML EMBED:
COPY

Goldman Sachs expected to announce accounting changes

John Dimsdale Jan 11, 2011
HTML EMBED:
COPY

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.

JOHN DIMSDALE:

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.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.