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Unformatted text preview: ability to be rewarded by their greed. Bu t eliminating greed is impossible,
whether in bankers or painters. The more thou ghtfu l qu estion to answer is:
how can bankers’ self-interest be realigned with that of their clients and the
pu blic? And that answer, necessarily, involves moving back to the partnership
Congress shou ld figu re ou t a way, by statu te or regu lation, to requ ire
investment banks to move back to the partnership model. Su ch a move wou ld,
necessarily, involve deleveraging of the banks, and a contraction of credit:
something that wou ld requ ire carefu l thou ght. Last week in The Atlantic,
Pascal-Emmanu el Gobry pu blished a perceptive piece on this problem.
Greg Smith will gain many fans with his anti-Goldman broadside. Bu t he
lashed ou t at Goldman’s flaws, withou t observing their u nderlying cau se. In a
sense, it’s not su rprising, becau se Smith wasn’t at Goldman when the IPO
took place, and he therefore lacks perspective on the change. Bu t the profit
motive is hu man. Real banking reform isn’t abou t lashing ou t, bu t abou t
restoring the connection between bankers’ profits and the economy they
Follow Avik on Twitter at @aviksaroy. 1 2 /1 0 /1 2 Want to Improve Goldman Sachs? Convert it Back into a Partnership - F orbes This article is available online at:
http://www.forbe s .com/s ite s /aroy/2012/03/14/want-to-improve -goldman-s achs -conve rt-it-backinto-a-partne rs hip/ forbes.com/sites/aroy/2012/03/14/…/print/ 3 /3...
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This note was uploaded on 01/27/2014 for the course FINA 2010 taught by Professor Wangyan during the Winter '11 term at CUHK.
- Winter '11