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Goldman Sachs seems to be taking more trading risks than any other Wall Street player.
The bank's value-at-risk — the amount it could lose from a single day's trading if the market moved against it — now stands at $240 million (£165 million).
That's a rise of 22%, far higher than Morgan Stanley, JPMorgan or Credit Suisse.
Goldman always insists that hedging strategies mean its potential losses are controlled, but an article in Time magazine last month asked if Goldman is effectively “gambling with taxpayer money”. The bank got $10 billion from the US Troubled Assets Relief Programme, money it says it is keen to pay back quickly.
Goldman made $1.8 billion in the first quarter, far better than expected. David Hendler of CreditSights says Goldman used government funding to “manufacture” the results employing “extremely high risk” trading strategies.
But Goldman insists it was merely taking advantage of less competition in the market.
