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Goldman Sachs: Democrats push financial regulation bill

April 27, 2010 |  8:03 am

Democrats lost no time Tuesday raising the political issue of financial regulation as a Senate panel probed Goldman Sachs and its role in the financial meltdown.

Panel chairman Sen. Carl Levin criticized Wall Street firms for lobbying against the financial regulatory overhaul legislation being pushed by the Obama administration and Senate Democrats. Republicans blocked Democratic efforts to bring the bill to the floor on Monday, but Democrats will try again to invoke cloture on Tuesday afternoon.

“Wall Street is on the wrong side of this fight,” Levin said. “It insists that reining in its excesses would unduly restrict a free market that is the engine of American progress. But this market isn’t free of self-dealing or conflict of interest. It is not free of gambling debts that taxpayers end up paying.”

Levin wrapped up his lengthy opening statement by putting Goldman’s actions into two contexts – the ongoing Senate debate about enacting tough new rules for Wall Street and the wide-ranging subcommittee investigation that already has focused on Washington Mutual, federal banking regulators and credit rating agencies.

“Running through our findings and these hearings is a thread that connects the reckless actions of mortgage brokers at WaMu with market-driven credit rating agencies and the Wall Street executives designing the next synthetic" investment, Levin said. “That thread is unbridled greed, and the absence of a cop on the beat.”

In a nod to polls that show American voters overwhelmingly blame Wall Street dealing for the economic meltdown, Republicans were also critical of Goldman’s dealings.

The panel’s top Republican, Sen. Tom Coburn (R-Okla.) was not at the hearing for its start, but Sen. Susan Collins (R-Maine) picked up on Levin’s theme of “unbridled greed.”

She described as “unseemly” Goldman’s bets against the market while it was selling mortgage-backed securities, and said it was “unsettling” to read e-mails of Goldman Sachs celebrating the collapse of the market.

Sen. John McCain (R-Ariz.) also briefly chimed in.

“There’s no doubt their behavior was unethical and the American people will render a judgment as well as the courts,” he said.

-- Jim Puzzanghera, reporting from Washington

-- Michael Muskal, reporting from Los Angeles