Blankfein

John Gapper

The idea that Lloyd Blankfein could be convicted of a criminal offence over Goldman Sachs’ activities leading up to the 2008 financial crisis still seems far-fetched to me, although it clearly worries Goldman’s investors.

The fact that Goldman’s chairman and chief executive has hired a prominent defence lawyer to deal with a US Justice Department investigation into the bank led to its shares falling nearly 5 per cent on Monday.

The most plausible charge – although none has been brought – would be perjury over Mr Blankfein’s evidence to a Senate committee. Senator Carl Levin has accused Goldman executives of being misleading by denying they had “a big short” on mortgage-backed securities. Read more

Times are given in US EST.

By Alan Rappeport

8:42pm – And nearly 11 hours after the hearings began, that’s a wrap.

8:35pm – The audience appears to be thinning in the meeting room. Mr Levin is giving his closing statement, giving one last run down of how the entire financial crisis ensued, for the record. Mr Blankfein’s face is locked in a squint and he is clutching his water glass. “I happen to be one that believes in a free market, but if it’s going to be free…it’s got to be free of deception. It needs a cop on the beat of Wall Street.” Read more

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By Alan Rappeport

3:13pm – The committee has excused the witnesses after an exhaustive array of questioning. The Goldman witnesses appeared to hold their own, often frustrating the Senators who probed aggressively. There will be a 10 minute recess before David Viniar, CFO, and Craig Broderick, chief risk officer, take the stage. We’ll return for the third panel featuring Lloyd Blankfein.

3:03pm – Mr Levin is returning to the bigger question of conflicts of interest. “For heavens sake, clients should know that when you are selling securities, that you are betting against those securities. I think it is intolerable and it needs to be addressed,” he said. Read more

John Gapper

Studying the claims made by Goldman Sachs about whether it would have collapsed if the US government had not bailed out the financial system, and invested $10bn in Goldman itself, is like Kremlinology in the days of the Soviet Union – every word counts.

So the use of the term “indispensable” by Lloyd Blankfein and Gary Cohn sent me to my dictionary to check the exact meaning of the word. Both men have previously denied, or at least cast doubt upon, the idea that Goldman needed to be rescued. Read more

By Alan Rappeport

Tune back in on Thursday morning at 9am ET when Sheila Bair, Mary Schapiro, Eric Holder and Lanny Breuer face the Financial Crisis Inquiry Commission.

12:25pm

First panel is now concluded and breaking for lunch. In the afternoon, Michael Mayo, J. Kyle Bass and Peter Solomon will face questions. Streaming video can be found hereRead more