The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Macaskill on markets: Goldman pins hopes on the Orient Express defence

The SEC fraud suit against Goldman Sachs has shone a spotlight on the exploitation of the useful idiots at the heart of the credit crisis. Goldman must now hope for similar suits against rival dealers so that it can try to deploy the Murder on the Orient Express defence – the argument that they all did it. But whether or not Goldman is joined in the dock by some of its peers, the industry now faces the most serious threat yet to its derivatives-based trading revenues and a business model of adopting multiple roles in the modern capital markets.

Jon Macaskill is one of the leading capital markets and derivatives journalists, with over 20 years’ experience covering financial markets from London and New York. Most recently he worked at one of the biggest global investment banks

Jon Macaskill is one of the leading capital markets and derivatives journalists, with over 20 years’ experience covering financial markets from London and New York. Most recently he worked at one of the biggest global investment banks

The rating agencies correctly attracted criticism for their role in offering a spurious security to investors in leveraged credit instruments. Their internal models were deeply flawed and agency officials proved to be easily manipulated by the investment bankers who structured trades.

The SEC suit over one of Goldman’s Abacus synthetic CDO trades shifted the focus to the external credit portfolio managers that were also played by bankers and some of their hedge fund clients, especially as the credit boom moved into its final stages.

The details of the SEC suit underline the sheer gullibility of many of the participants in the credit boom.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree