Here’s your Cheat Sheet to the week’s top business headlines for Goldman Sachs and Morgan Stanley:
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Goldman Sachs Group (NYSE:GS): Current price $144.48
Goldman Sachs and Morgan Stanley have reached agreements in principle with the Federal Reserve Board for them to pay $557 million in cash payments, along with and other assistance to aid mortgage borrowers. These resolutions are not unlike those reported on January 7th between 10 mortgage servicing firms and the Office of the Comptroller of the Currency and the Federal Reserve Board. Goldman Sachs and Morgan Stanley were subject to enforcement actions for their deficient practices in mortgage loan servicing and foreclosure processing, as were other lenders. The amount paid by Goldman Sachs and Morgan Stanley includes $232 million in direct payments to eligible borrowers and $325 million in other sorts of assistance, such as loan modifications and forgiveness of deficiency judgments.
Pressure from investors to reduce costs had gone unattended by the top executives at Goldman until this week. The officers are said by sources to finally have given in to cuts to staffing levels and compensation, although for the past two years they had opposed such measures on the grounds that if they reduced staff too much they would then be unprepared when the economy turns around and business returns, according to Reuters.