Das ist Lloyd Blankfeins einleitender Redetext vor dem Untersuchungsausschuß des US Senats gewesen
Chairman Levin, Ranking Member Coburn and Members of the Subcommittee:
Thank you for the invitation to appear before you today as you examine some of the causes and consequences of the financial crisis.
Today, the financial system is still fragile but it is largely stable. This stability is a result of decisive and necessary government action during the fall of 2008. Like other financial institutions, Goldman Sachs received an investment from the government as a part of its various efforts to fortify our markets and the economy during a very difficult time.
I want to express my gratitude and the gratitude of our entire firm. We held the government’s investment for approximately eight months and repaid it in full along with a 23% annualized return for taxpayers.
Until recently, most Americans had never heard of Goldman Sachs or weren’t sure what it did. We don’t have banking branches. We provide very few mortgages and don’t issue credit cards or loans to consumers. Instead, we generally work with companies, governments, pension funds, mutual funds and other investing institutions. These clients usually come to Goldman Sachs for one or more of the following reasons: (1) they want financial advice; (2) they need financing; (3) they want to buy or sell a stock, bond or other financial instrument; or (4) they want help in managing and growing their financial assets.
The 35,000 people who work at Goldman Sachs, the majority of whom work in the United States, are hard-working, diligent and thoughtful. Through them, we help governments raise capital to fund schools and roads. We advise companies and provide them funds to invest in their growth. We work with pension funds, labor unions and university endowments to help build and secure their assets for generations to come. And, we connect buyers and sellers in the securities markets, contributing to the liquidity and vitality of our financial system.
These functions are important to economic growth and job creation.
I recognize, however, that many Americans are skeptical about the contribution of investment banking to our economy and understandably angry about how Wall Street contributed to the financial crisis. As a firm, we are trying to deal with the implications of the crisis for ourselves and for the system. What we and other banks, rating agencies and regulators failed to do was sound the alarm that there was too much lending and too much leverage in the system — that credit had become too cheap. One consequence of the growth of the housing market was that instruments that pooled mortgages and their risk became overly complex. That complexity and the fact that some instruments couldn’t be easily bought or sold compounded the effects of the crisis.
While derivatives are an important tool to help companies and financial institutions manage their risk, we need more transparency for the public and regulators as well as safeguards in the system for their use. That is why Goldman Sachs, in supporting financial regulatory reform, has made it clear that it supports clearinghouses for eligible derivatives and higher capital requirements for non-standard instruments.
As you know, ten days ago, the SEC announced a civil action against Goldman Sachs in connection with a specific transaction. It was one of the worst days in my professional life, as I know it was for every person at our firm. We believe deeply in a culture that prizes teamwork, depends on honesty and rewards saying no as much as saying yes. We have been a clientcentered firm for 140 years and if our clients believe that we don’t deserve their trust, we cannot survive.
While we strongly disagree with the SEC’s complaint, I also recognize how such a complicated transaction may look to many people. To them, it is confirmation of how out of control they believe Wall Street has become, no matter how sophisticated the parties or what disclosures were made. We have to do a better job of striking the balance between what an informed client believes is important to his or her investing goals and what the public believes is overly complex and risky.
Finally, Mr. Chairman, the Subcommittee is focused on the more specific issues revolving around the mortgage securitization market. I think it is important to consider these issues in the context of risk management.
We believe that strong, conservative risk management is fundamental and helps define Goldman Sachs. Our risk management processes did not, and could not, provide absolute clarity; they highlighted uncertainty about evolving conditions in the housing market. That uncertainty dictated our decision to attempt to reduce the firm’s overall risk.
Much has been said about the supposedly massive short Goldman Sachs had on the U.S. housing market. The fact is we were not consistently or significantly net “short the market” in residential mortgage-related products in 2007 and 2008. Our performance in our residential mortgage-related business confirms this.
During the two years of the financial crisis, while profitable overall, Goldman Sachs lost approximately $1.2 billion from our activities in the residential housing market.
We didn’t have a massive short against the housing market and we certainly did not bet against our clients. Rather, we believe that we managed our risk as our shareholders and our regulators would expect.
Mr. Chairman, thank you for the opportunity to address these issues. I look forward to your questions.
Und das ist der einleitende Redetext von FABRICE TOURRE
Chairman Levin, Dr. Coburn and Members of the Subcommittee. My name
is Fabrice Tourre, and I work at Goldman Sachs International in London. Thank
you for the opportunity to appear before the Subcommittee.
I have worked at Goldman Sachs since 2001. Between 2004 and 2007, my
job was primarily to make markets for clients. I made markets by connecting
clients who wished to take a long exposure to an asset — meaning they anticipated
the value of the asset would rise — with clients who wished to take a short
exposure to an asset — meaning they anticipated the value of the asset would fall. I
was an intermediary between highly sophisticated professional investors — all of
which were institutions. None of my clients were individual, retail investors.
The structured products on which I worked fill an important need for these
sophisticated financial institutions. To the average person, the utility of these
products may not be obvious. But they permit sophisticated institutions to
customize the exposures they wish to take in order to better manage the credit and
market risks of their investment holdings.
Mr. Chairman, as you know, the Securities and Exchange Commission
(“SEC”) recently filed a civil suit alleging that I failed to disclose to investors
certain material information regarding a transaction that I helped to structure called
“ABACUS 07 AC-1”. I deny — categorically — the SEC’s allegation. And I will
defend myself in court against this false claim.
Since the suit was filed, there have been many questions raised about the 07
AC-1 transaction and my role in it. I appreciate the opportunity to answer those
questions, and I want to make a few points absolutely clear.
First, the only two investors in this transaction, ACA and IKB, were
institutions with significant resources and extensive experience in the CDO market.
ACA was a specialty financial services company that, at year-end 2006, managed
22 CDOs with approximately $16 billion in assets. IKB, a large German bank, had
a separate mortgage group and was an active participant in the CDO market.
According to IKB, as of January 2007, they had launched and managed more than
$16.8 billion of CLOs and CDOs and viewed securitizations and CDO investments
as an integral part of their business model.
Second, I never told ACA, the portfolio selection agent, that Paulson &
Company would be an equity investor in the AC-1 transaction or would take any
long position in the deal. Although I don’t recall the exact words that I used, I
recall informing ACA that Paulson’s fund was expected to buy credit protection on
some of the senior tranches of the AC-1 transaction. This necessarily meant that
Paulson was expected to take some short exposure in the deal. Moreover, from the
early stages of the transaction in January 2007 to its completion several months
later, none of the offering documents, including the term sheets, flip book and
offering circular, provided to ACA indicated that Paulson’s fund would be an
If ACA was confused about Paulson’s role in the transaction, it had every
opportunity to clarify the issue. Representatives of Paulson’s fund participated
directly in all of my meetings with ACA regarding the transaction. I do not ever
recall ACA asking me or Paulson’s representatives if Paulson’s fund would be an
equity investor. Indeed, ACA and Paulson had several discussions about the
transaction and at least one meeting without any Goldman Sachs representatives
present. Quite frankly, I am surprised that ACA could have believed that the
Paulson fund was an equity or long investor in the deal.
Third, the AC-1 transaction was not designed to fail. ACA and IKB were
two of the most important clients of my desk. Moreover, the securities referenced
in the transaction did not underperform the other securities of that ratings class and
vintage. All of the securities of that ratings class and vintage performed poorly
because the subprime mortgage market suffered a broad collapse. Goldman Sachs
also had no economic motive to design the AC-1 transaction to fail. Quite the
contrary, we held long exposure in the transaction just like ACA and IKB. When
the securities referenced in AC-1 declined in value, we lost money too. Goldman
Sachs’ overall losses in connection with the transaction exceeded $100 million,
including $83 million with respect to the retained long position.
Finally, ACA selected the portfolio of securities referenced in the transaction
– not Paulson & Company. ACA had sole authority to decide what securities
would be referenced in the transaction, and it does not dispute that point. Neither
the Paulson fund nor Goldman Sachs could dictate to ACA the securities
referenced in the deal. Paulson’s fund made suggestions to ACA, as did IKB and
Goldman Sachs. And the SEC complaint concedes that ACA rejected most of
Paulson’s suggestions while accepting others. So, while Paulson, Goldman Sachs
and IKB all had input into the reference portfolio for AC-1, ACA ultimately
analyzed and approved every security in the deal. Thus, when Goldman Sachs
represented to investors that ACA selected the referenced securities, that statement
was absolutely correct.
Mr. Chairman, the last week has been challenging for me and my family, as
I have been the target of unfounded attacks on my character and motives. I
appreciate the opportunity to appear before the Subcommittee to answer these false
charges. I wish to repeat — I did not mislead IKB or ACA, two of the most
sophisticated institutional investors in these products anywhere in the world. I will
be pleased to answer any questions that the Subcommittee may have.