A bank rules the
world
Greed,
discretion and financial risk is the motto of probably the world’s most
powerful bank, Goldman Sachs. With more than 30.000 employees and capital of
about 700 billion euros which is twice as high as the French national budget, Goldman
Sachs became a global player in the finance sector. Goldman Sachs (G.S.) never works
with private customers, their only clients are countries and big companies like
Ford, Facebook and BP. The main principle of G.S. is that, to price everything and when they know the value of it they bet on financial
fluctuations on the market. Trough the fluctuations the price changes and G.S.
makes money. A good example is the “Abacus Project” in 2007. The Bank sold bad
financial products to customers as triple “A” products, which is the safest
product on the market. But soon the finical value of the product dropped and
many people lost their money. Goldman Sachs earned at the same time money
trough the disposal of the financial products, furthermore, they bed on the stoke
exchange against the product they sold. To put it all in a nutshell the “Abacus
Project” was a very profitable transaction, they made an incredible
amount of 750.000.000 euros.
Henry Paulson from Goldman Sachs and former finance minister of the USA, supported many banks in the financial crisis with the help of tax money, however, he prevented in
2008 the rescue of the bank Lehman Brother. Lehman
Brothers was the biggest competitor for G.S. on the finance market. At the same
time he saved a big insurance company called AIG, with the help of tax money.
Goldman Sachs cooperated with AIG and in case AIG had gone bankrupt G.S. would have
lost about 10 billion euros. Henry Paulson removed the biggest competitor of G.S.
and prevented a big finical loss at the same time. A great success for Goldman
Sachs - only a coincidence?
During the
financial crisis Goldman Sachs helped Greece to reduce their depts. This
happened with a “Swap”. To put it simply, G.S. changed Greece's balance sheet for a huge amount of money. Greece could now borrow new money bond, but
they have to pay really high interests to Goldman Sachs that arranged this new
credit. So on the one hand Greece reduced their depts, but on the other hand they
have to pay a yearly sum of 400.000.000 euro to Goldman Sachs which is a lot for
a country that is almost bankrupt. Through its dubious behavior the bank is
endangering the Euro Zone. Although G.S. is without any doubt responsible for
the crisis in Greece, they never apologized for their actions. Furthermore, in an
official statment the bank said they would do it again. In their opinion they did not break the law since it was a legal action, but to my mind ethical doubtable.
Another strategy of the bank is to occupy
several political positions with their former employees. This influence guarantees Goldman Sachs
opinion in the politics. Due to the fact that many politicians are former G.S.
employees, there is lobbying and a conflict of interest, but no one does
something against it. For example the
new President of the European Central Bank, Mario Draghi, is an ex officer from Goldman Sachs. The bank forces the world to use their model and resuming their former employees making it almost impossible for anyone else to antagonize its system. So it is easy for them to avoid laws, which restrict the financial sector.
We wrote this text to emphasize that G.S. has a lot power in the political and financial sector. We must enact laws, which prevent lobbying and a conflict of interest. These laws are important to prevent a second financial crisis and to regulate the financial market.
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