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Why aren't clients fleeing Goldman Sachs?

14 pointsby mattraibertalmost 14 years ago

1 comment

EugeneGalmost 14 years ago
I think there are two main reasons.<p>The first is that Goldman has two types of clients: banking and trading. Banking clients are generally unaffected by Goldman's trading misdeeds. These are very different businesses. Investment banking does not happen on a trading floor, very different services, very different people etc. Everything is different.<p>The second is that professional trading clients understand that Goldman is not there to look out for them in deals. Goldman acts as a counterparty, not as a fiduciary advisor who is obligated to fight for the clients' best interest.<p>I think there is a common misconception that Goldman acts sort of like a manufacturer of widgets, that these widgets turned out to be broken, and that Goldman should now be held responsible sort of like a Chinese manufacturer of poison-laced toys. The Goldman-counterparty relationship is very different.