"By Pam Martens and Russ Martens: December 7, 2023 ~  David Solomon, Chairman and CEO, Goldman Sachs David Solomon, Chairman and CEO of Goldman Sachs, let it slip out at yesterday’s Senate Banking hearing what is really driving the mega banks’ backlash against federal banking regulators’ proposal to raise capital requirements at banks with more than $100 billion in total consolidated assets. (Community banks would not be impacted by the proposed capital increases.) Solomon responded as follows to a question on the proposed new rules, attempting to justify how the trillions of dollars in derivatives his firm is holding inside its federally insured and taxpayer-backstopped commercial bank, Goldman Sachs Bank USA, is helping the country and that raising capital requirements on those trades would raise costs to consumers: “You can look at airlines hedging jet fuel; you wanna look at other derivatives, which obviously gets passed on to consumers; you can look at gas being hedged in utilities, which obviously gets passed on to consumers; and then you can look at other transactions. There’s a provision under the rule called SFT, which allows institutions like ours to borrow securities from pension plans and give them cash. That increases their returns and allows them to use their assets to increase their returns. Capital would increase by eight times for those types of transactions, which would make them unattractive and would therefore diminish the ability of pensions to access that tool to increase their returns.” This one paragraph above goes to the heart of why these mega banks on Wall Street have launched one of the fiercest lobbying campaigns in their history – including attack ads on television – to stop these rules from taking effect. It’s all about derivatives, short sales, and dangerous trading activities taking place – not in the firm’s broker dealer or investment bank but in the federally-insured commercial banks they are allowed to own, which are backstopped by the American taxpayer. Goldman’s Solomon makes it sound like his firm’s only involvement in derivatives is to help its business customers hedge legitimate risks, but Goldman itself is taking huge risks in derivatives for its own trading book and housing those derivatives in its federally-insured bank. As for Goldman paying pensions cash to borrow their securities, those securities are highly likely being used to loan out those securities to Goldman’s hedge fund clients in order for them to engage in shorting the market. For the derivatives condition Goldman Sachs was in at the time of the 2008 financial crash, the chart below from the Financial Crisis Inquiry Commission puts to rest the idea that bank examiners or internal risk managers are capable of overseeing the safety and soundness of casino banks. " https://wallstreetonparade.com/2023/12/wall-street-ceos-want-the-line-betwee...