Let Us Now Praise Goldman Sachs

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Don't hesitate to take your turn.

“The best trader on Wall Street managed to go through a difficult trading environment successfully,” Brad Hintz, banking analyst at Sanford C. Bernstein & Co., told The Wall Street Journal last week. He was talking about Goldman’s second quarter, but the phrase could easily apply to the firm’s last five years….

How did Goldman do it? And, more important, will its newly polished corporate reputation remain untarnished?

Well, why don't we ask some unbiased observers?

Goldman insiders answer the first question in two parts. At first, they say, the firm focused on four key constituencies vital to its survival and prosperity: employees, clients, shareholders and regulators. Notice how public opinion wasn’t on the list.

In the heady period following April 2010, when the Securities and Exchange Commission filed civil fraud charges against Goldman, the firm’s executives decided that the public wasn’t worth the trouble.

OK, so maybe it was worth a little bit of trouble. And a lot of money.

The second part of Goldman’s efforts was taking place at roughly the same time but behind the scenes. Caught out by the public reaction to its activities, Goldman set out in 2010 to broaden and deepen its reach beyond Wall Street. The crisis had taught Goldman a lesson: You don’t have to be a public-facing business to become public enemy No. 1.

The bank poured money and people into functions that for years it had neglected, including a more-informative website, digital advertising—Goldman now spends tens of millions a year on that—a social-media strategy, and so on. It also embarked on a big effort to overhaul its business practices.

And let's not forget the page that Lloyd Blankfein took from Ben Bernanke's book.

More recently, its chairman and chief executive, Lloyd Blankfein, has stepped out of the ivory tower, grown a quasi-trendy beard and engaged on issues ranging from gay marriage to fiscal responsibility. It is a far cry from that cloudy day in late April 2010, when a clean-shaven Mr. Blankfein squinted and sweated his way through a contentious U.S. Senate hearing over Goldman’s alleged role in swindling homeowners and investors.

Goldman Makes the Case for Its Future [WSJ Money Beat blog]

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