Goldman Sachs faces fraud charges from the Securities and Exchange Commission for setting up the security to fail, an allegation executives for the company fiercely disputed Tuesday in testimony to a Senate panel.
“These Goldman guys are mad because they were targeted at
this time, and they think that they didn't violate the law,” Clinton said
Wednesday. “I'm not at all sure they violated law, but I do believe there was
no underlying merit to the transactions, and that's what I think we need to
Clinton, speaking at an event in Washington sponsored by the Peter G. Peterson Foundation, said he had questions about the SEC’s complaint.
Clinton said he wasn’t sure Goldman violated the law “by not telling people” about certain information “because of the ability of the people on the other side to get information.”
“I think there's a bigger problem here, which is that too much of our growth in the last decade was in finance,” he added.
If Goldman was wrong and the real estate derivatives' value hadn't plummeted, investors would have continued “pouring money into an unsustainable bubble,” Clinton said.
Clinton said policymakers should seek to reduce the leverage of investment banks and increase transparency for their derivative products.
“I think too much of this stuff has no economic purpose no matter who wins or who loses,” he said.