White House officials and Democratic lawmakers seized on internal e-mails from Goldman Sachs Group Inc. to push for curbs including a ban on proprietary trading as they brace for a Senate showdown on Wall Street oversight.
Democratic Senator Christopher Dodd, chairman of the Senate Banking Committee, and Senator Sherrod Brown, also a Democrat on the panel, said yesterday the e-mails help show why rules such as the Volcker rule are needed. Obama administration adviser Austan Goolsbee called the proposal to end trading for a bank’s own account “highly relevant” to ending conflicts of interest.
“These e-mails signify that there are all kinds of conflicts of interest on Wall Street, that Wall Street is working for its clients and working against its clients in the same sort of bundled toxic securities,” Ohio’s Brown said yesterday on ABC’s “This Week,” where Goolsbee also appeared. “That’s why we need the Volcker rule. That’s why we need really strong reform that will separate the proprietary trading from banking functions.”
Lawmakers are using the e-mails to bolster support for rules that could crimp earnings at Goldman Sachs, the most profitable firm in Wall Street history, 10 days after it was sued for fraud by the Securities and Exchange Commission. The Volcker rule, named for former Federal Reserve Chairman Paul Volcker, now an adviser to President Barack Obama, is included in Dodd’s financial-rules overhaul, which faces a test vote in the Senate today. The Democrats need at least one Republican vote to open the debate.