If GS Is A Commercial Bank, Why Do They Still Play By Investment Banking Rules (Grayson Congressional Letter Questions Bernanke)
Jul 29, 2009 at 2:11 PM
DailyBail in VaR, bernanke, commercial bank, congress, federal reserve, federal reserve, goldman sachs, goldman sachs, grayson, investment bank

It's becoming more than occasionally appalling to watch the games played by Goldman Sachs as they run roughshod over Washington.  First some background.  Goldman applied and was quickly granted official status as a bank holding company during the crisis last September, with the result being immediate and unlimited access to the Federal Reserve's discount window.  Ahhh, easy overnight cash, but at a stiff price you naturally assumed.  Not so fast, this is Government Sachs we are discussing.

Conversion to a bank holding company would normally require higher regulatory capital requirements, reduced leverage and less risk overall.  But again, not if you're Goldman Sachs.  In January, Blankfein requested an exemption from these pesky new requirements, and true to its capture, the Fed naturally granted the exemption, explained in this letter to Government Sachs dated February 5th.

Though it has since taken 5 months, and one corrupted, highly-suspect, taxpayer-assisted 2Q profit blowout for anyone in Congress to pay attention, we finally have some Congressional pushback worthy of mention. 

Not surprisingly, the push is being led by anti-bailout stalwart Rep. Alan Grayson of Florida.  On Monday (7-27), Grayson and several other members penned a polite missive to Fed Chairman Bernanke, questioning B-52 on the details of Goldman's various exemptions including that for VaR (Value-at-risk), which have allowed GS to play in both sandboxes.  Goldman receives all the funding benefits due a stable bank holding company, while pushing their market VaR to an all time high last quarter.

I've embedded both letters below. You might wish to contact Grayson directly, and let him know how you feel.


Grayson-Congressional Letter to Bernanke Regarding Goldman Sachs' Special Exemptions  7/27


The Fed's Affirmative Response To Goldman's Request For Special Exemption  2/05/09


Please help by emailing this article to a few friends.  Promoting much greater awareness is the only way we're ever going to beat the banksters and stop the heist.  Sending just 2 emails can make a tremendous difference.  Thank you!

Article originally appeared on The Daily Bail (http://dailybail.com/).
See website for complete article licensing information.