[brianwawok]

Your quote is about honesty. OPs quote was about unhedged rusk. They have little to no relation. You can be both a dishonest trader AND a smart one.

[kafkaesq]

Actually the comment I was responding to was about "running a tight shop" -- which is about operational integrity in general (not just on the matter of unhedged risk).

In the, you know, "would you buy a used car from these guys?" sense.

[notyourwork]

Perhaps a difference of definition but I don't consider a tight shop to have anything to do with morals or integrity. Tight shops I always considered efficient and optimized. Car dealerships are shady, but they can run a tight shop.

[kafkaesq]

Until they get caught (and heavily fined). Whereupon management suddenly decides that maybe those practices weren't so "tight" after all.

[qaq]

The only reason GS is still around is because they did what they did. They protected their shareholders the fine is trivial (less than 10%) compared to the losses they would have taken if they followed the course of action that everyone else did.

[kafkaesq]

A $13b bailout on suspiciously favorable terms had something to do with it, also.

[qaq]

What is suspiciously favorable about it? the terms were uniform. The real kick back to all banks was the unwind of AIG.

[notyourwork]

Absolutely right! Its usually context specific.

[qaq]

Operational integrity for investment bank is to a very significant degree risk management. Integrity as in having control over something not in a moral sense. In the case you referenced I'd rather see GS's counterparties taking more blame. The whole we are poor guys running multi-billion dollar funds and charging millions in fees didn't do due diligence and want to blame someone else thing is pure BS.