Outlook So far, so good for Goldman Sachs. Not only did yesterday's robust first-quarter trading update suggest that the investment bank is recovering even more quickly than expected from the financial crisis, but there is also no reason to think the Government is about to give it the push from all those profitable contracts it currently enjoys with British taxpayers.
Indeed, Alistair Darling yesterday explicitly rejected the calls – first highlighted in The Independent – for the Treasury to sever links with Goldman because of the allegations of fraud it now faces. The Chancellor argued that the bank had been accused of fraud, but not yet found guilty.
One sees his point. But Mr Darling's boss doesn't seem to have too many doubts about Goldman's flaws. Appearing on television on Sunday, Gordon Brown was only too happy to talk tough on the bank, accusing it of "moral bankruptcy" and promising to "change the behaviour" of the City. Strong words, but can you simultaneously award a bank hugely valuable contracts and encourage a change in behaviour?
What certainly won't change Goldman's behaviour, by the way, is the tax on bankers' bonuses to which the Chancellor pointed when asked about the bank's award of $3.6bn to staff in the first quarter. As he surely knows, this is remuneration that won't actually be handed over until the end of the bank's year, by which time Mr Darling's one-off levy will be only a distant memory.
Still, the juxtaposition of words such as Goldman Sachs, bonus and fraud was always going to be manna in the middle of an election campaign. And given that both the Conservatives and the Liberal Democrats have been so quick to call for the Government to get rid of Goldman, we can presumably assume that both parties will do exactly that should they find themselves in office in a little over two weeks' time?
Seriously though, this sort of politicisation of the process of justice is deeply dangerous. The crowds are already baying for blood from the bankers; whipping up further fury for electoral gain is deeply irresponsible – and downright dishonest if you have no intention of following through on what you say.
It would be interesting to know, for example, what contact there has been between the Treasury and the Financial Services Authority over the past day or two. On Monday, the regulator said it was looking into the Goldman allegations – by yesterday, these inquiries had turned into a full-blown official investigation.
It isn't just our lot who play these games. The revelation yesterday in the US that the SEC commissioners were split, broadly along party political lines, on whether to proceed with formal charges against Goldman, gives some succour to the investment bank's case that it is being picked upon so publicly in order to help President Barack Obama's push for tighter financial regulation.
None of which is to defend Goldman, which clearly has some very serious charges to answer. It is, however, as entitled to the rest of us to an opportunity to defend itself – and until the bank has had its day in court, the politicians ought to go easy on their declarations of outrage.Reuse content