Goldman Sachs: the death of the vampire squid

FOR years Goldman Sachs was regarded with a mixture of awe and fear.

The great vampire squid, in the irresistible description dreamt up by Matt Taibbi of Rolling Stone, was wrapped around the face of humanity, jamming its blood funnel into anything that smelt like money.

If this was fair once, at times it seemed to be, the squid has been killed off by a mixture of market forces and Goldman’s own desire to move on. It no longer seems relentlessly, suspiciously, ahead of rivals. It’s just another very big, very successful bank. We’ll stop short of saying it’s good for society — let’s keep it real — but there seems far less reason to fear it than there was.

From the Wall Street Journal this week: Goldman Sachs Lifts the Veil to Woo Sceptical Shareholders. Goldman is taking a “shot at transparency”, the paper reports, in a bid to arrest a share price that has gone nowhere for a decade and has fallen well behind arch rival JP Morgan.

Goldman is having its first ever investor day at the end of January. Next week’s annual results will see it disclose all manner of details it would previously have kept private.

This is not entirely a matter of being open for the sake of it — bonuses get paid partly in shares the executives think are undervalued; they think this is a solution. Even so, this is a changed organisation. Conversations with the bank that under previous management might have been blunt verging on paranoid are relaxed.

Criticism is fine; offence needn’t be taken. Partly this is Goldman recognising reality. Its once mighty trading arm lately gets it wrong as much as mere mortals tend to. The investment bankers back the flotations of what turn out to be turkeys more regularly than Christmas.

But if the new transparency is real, if it lasts, that’s good for the City and probably good for Goldman.