A Goldman Sachs banker has a crisis of conscience

It’s an event that’s both rare and comical: Americans are fascinated by the story of a Goldman Sachs banker’s ethical crisis. After working there for 12 years Greg Smith made the following discovery: “My bank is only interested in making money”.

On his last day working for the most powerful bank in the world, Greg Smith – up until then a brilliant, high-flying executive director at the bank – published an article in the New York Times. He handed in his resignation, having for several years no longer been able to identify with his company. Goldman Sachs had once been a bank where “team-work, humility and integrity” were encouraged, all in the interests of the customers. But now the atmosphere had become “toxic and destructive”; the bankers were interested only in making money for themselves instead of their customers, whom they called “muppets”.

Greg Smith, with 12 years’ seniority, now feels appalled at having to sell toxic financial products to his customers, and swears to God this never used to happen. Readers will recall that it was also 12 years ago that Goldman Sachs started massaging Greece’s accounts.

Besides this demonstration of remorse, it is the scale of the reaction to this article which is remarkable - with more than 2600 articles, news items, and editorials in the American press over two days. Leader-writers have not held back, some demanding the resignation of Goldman Sachs’ current CEO, others theorising about the impact that these “revelations” might have on the markets.

Forbes has the following revealing story, showing that bankers ought in fact to be good people. J. P. Morgan founded the bank that bears his name in the 19th century. Towards the end of his life he explained that integrity - not money or property - was central to success in banking. In his opinion it is impossible for anyone to trust their fortune to someone in whom they do not have total confidence. And yet who nowadays has total confidence in the CEO of their bank? Of course, it is a shame that Forbes did not reveal that this same J. P. Morgan made his fortune from the slave trade, before he turned his hand to giving lectures about integrity.

Read also: Goldman Sachs and Greece: a vampire tale