NEW YORK (TheStreet) - Goldman Sachs (GS) has begun scanning internal emails for the term "muppet" and other evidence that employees referred to clients in derogatory ways, CEO Lloyd Blankfein told partners in a conference call this week, Reuters reported, citing people familiar with the call.
Greg Smith, a former banker at Goldman Sachs, wrote in a scathing op-ed piece in The New York Times last week that he saw Goldman managing directors often refer to clients in internal emails as muppets, which is slang for a stupid person in Britain.
The article has kicked up a storm as critics call for a change in Goldman's culture while supporters believe that the firm is being unfairly targeted.
Federal Reserve Chairman Ben Bernanke will continue his series of lectures to students.Meanwhile FOMC voting member Daniel Tarullo will speak on regulatory reform before the Senate Committee on Banking, Housing and Urban Affairs. According to prepared remarks, Tarullo will call for greater attention to the international impact of the Volcker rule. "U.S. regulators will need to carefully consider the concerns that have been raised and the broader international implications of the Volcker Rule as we work to finalize our implementing rules," said Tarullo, in his testimony. The Volcker rule, which has been designed to limit firms from making risky bets with their own capital, has been criticized for being highly complex in its current form, with potentially severe consequences to the liquidity of certain markets. While banks such as JPMorgan Chase (JPM) and Goldman Sachs which have considerable capital markets operations have the most to lose, international governments in U.K. and Canada have also objected to the rule because it exempts proprietary trading in U.S. sovereign debt but not in other foreign sovereign debt.
Thursday also brings economic data that could move bank stocks including jobless claims and the FHFA House Price Index. Jobs data has been improving, which is positive for banks. However, banks themselves continue to layoff employees as they struggle to generate revenue in a post-regulatory environment. Bank of America (BAC) continues to cut jobs, with recent reports pointing to several layoffs in its equities research and trading divisions.
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