SA man’s victory for integrity

2012-03-17 08:56

A man who grew up in South Africa, Greg Smith, set the global financial story this week.

Smith, a banker with Goldman Sachs, resigned in a blaze this week, knocking the financial giant’s share price and catalysing another round of introspection about the shape of modern capitalism and the culture of the Masters of the Universe, as the dealmakers who run Wall Street and the City of London are known.

Smith has caused a firestorm because he is among the first group of insiders who have turned outsiders. He quit, he said, because the culture of the bank had changed from a

client-first model to one that shamelessly fleeced in search of profit.

His now famous resignation letter, published earlier this week in the New York Times, let the cat out of the bag on how the bank placed client interests below their own in double-sided deals.

That investment banks can be both dealmakers and profitmakers is a fundamental and institutionalised conflict.

It comes on top of years of investigation into the global financial crash and the role of the investment banks in designing and selling opaque and potentially destabilising products.

Smith has written himself into the financial history books with an act that was both brave and principled. He has struck a victory for integrity over ambition in a world that makes such action difficult. 

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