In a touching display that its freedom is (almost) not for sale, Goldman Sachs, the investment bank, pleased markets this week with a plan to exit the US troubled asset relief programme. The government should take note, and be worried.
Lloyd Blankfein, Goldman's CEO, says the bank escaped the subprime mortgage storm with less damage than its competitors. When the wholesale funding markets on which it depended suddenly froze last autumn, Goldman was naturally not above taking money where it could find it. With little ceremony, it converted itself into a bank holding company to be eligible for the Tarp then being put together by the US Treasury.
The bank now intends to be the first to throw off the government's golden fetters – $10bn in the form of preferred stock and share warrants. With a planned issue of $5bn in new common stock and strong quarterly earnings of $1.8bn, it may soon be in a position to do so. Other banks are likely to follow. Life under the Tarp is better than death, but not by much. It puts strict caps on executive compensation. And Congress's promiscuous imposition of conditions, such as a petty and self-damaging limit on skilled foreign staff, suggests more meddling to come.