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The (further) ‘Goldmanisation’ of US finance

Well, well, what a surprise: (yet) another Goldman Sachs banker is preparing to impart his wisdom - and presumably influence - to the US administration.

In what could only be described as further “Goldmanisation” of the US economy, Ken Wilson, Goldman’s top financial-institutions banker, will “temporarily” leave the firm to advise Treasury secretary Hank Paulson on how to resolve the country’s banking crisis, according to the Wall Street Journal.

The move is the latest in a series of Goldman to US administration transfers, notable among them Paulson himself and before him, the likes of Bob Rubin as Treasury secretary and quite a few others. This one was at the personal request of George W. Bush, who called Wilson in recent days to convey his invitation, according to the Journal.

As chairman of Goldman’s Financial Institutions Group, Wilson has played a big role in capital raisings and reorganisations across the banking sector, and will join Paulson to “address issues from a more macro perspective”, the paper said.

Wilson’s move comes as the Treasury and Federal Reserve contemplate the prospect of more bank failures, “alarming capital levels” and “crises of confidence” in important institutions such as Fannie Mae and Freddie Mac.

Oh, and in a display of what is clearly intended to appear as selflessness (and a very high pay-grade), Wilson is expected to serve without pay in a stint that will last through January.

This entry was posted by Gwen Robinson on Monday, July 21st, 2008 at 8:30 and is filed under Capital markets, People. Tagged with , . You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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Comments

  1. Jul 22   7:20 Posted by Gwen Robinson [report]

    “Colonials” don’t know how to spell.. that’s an interesting observation…

  2. Jul 21   22:01 Posted by Anonymous [report]

    Let’s be honest here, at least among us…Wall St. has been filled with the best and brightest for decades, PHDs, best Ivy League, BSchool grads and board scores and grades, blah, blah, blah and these are exactly the people that brough us sub-prime. Gimme a break! So much for the value of IQ when basic impulses strike. The human brain ain’t very smart when “quick money” is involved. Another Goldman genius is just further sign of capitulation of the Wall St./Cowboy Capitalism (yes, even for you Brits)/Merchant Banking ethos. Last throes, I’d say. RIP. Brain tendency again. Good money after bad seems our proclivity but this toothpaste ain’t going back. It’ll take DC a few more painful lessons to learn. Sad but very numan. Cheers!!

  3. Jul 21   18:21 Posted by burnt quant [report]

    > graduated from a top business school but was unable to produce financial analyses or DCF valuations without basic mistakes in them

    Sounds like they will fit right in at the Treasury then!

  4. Jul 21   17:32 Posted by T Dealmaker [report]

    P.S. — Sorry for the zed in “Goldmanization” in the previous comment. Bloody colonials still don’t know how to spell properly. Oh well, at least you have Ross Kemp.

    TED

  5. Jul 21   17:29 Posted by T Dealmaker [report]

    This correspondent witnessed Paulson and his predecessor at Goldman–who is now Director of the National Economic Council–Stephen Friedman canoodling over a hot cross bun at a posh New York restaurant yesterday evening.

    A sign of further Goldmanization of the United States’ Financial Star Chamber? Inquiring minds want to know.

    TED

  6. Jul 21   15:24 Posted by PW [report]

    It’s funny how the world views Goldman’s bankers as residing at the pinnacle of investment banking. I was once working as M&A Director at a FTSE 100 company and we had hired GS to advise on an M&A transaction. One of the executives on the GS team (who is now an Executive Director there) had apparenly graduated from a top business school but was unable to produce financial analyses or DCF valuations without basic mistakes in them, which were spotted and corrected by my team. Makes you wonder.

  7. Jul 21   14:02 Posted by Anonymous [report]

    Talk about conflict of interest. At the minimum, GS will be no worse off because of US economic and financial policy decisions come Wilson’s & Paulson’s January posture than they are now. More likely, GS–and the financial sector–will benefit from the “Goldmanization” of Treasury–all at the expense of American taxpayers.

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