Goldman Sachs to disclose how it makes its money

GOLDMAN Sachs is to disclose more information about how it makes its revenues, in response to pressure from shareholders, regulators and others.

In a newly-released 63-page report, prepared over more than eight months of internal review into the issues, the investment bank has set out a 39-point plan to improve disclosures, better inform clients, and provide more details of where trading revenues come from.

The report's release is seen as a response to years of investor accusations that its financial statements are opaque and client complaints about conflicts of interest.

The report says the investment bank will give clearer details of Goldman's professional responsibilities to its clients, and specifically the nature of the individual relationship and the particular activity the client asks Goldman to undertake.

It will set stronger standards for identifying, reviewing, approving and documenting structured products and how they are considered for client suitability.

The bank will establish a dedicated committee to consider new products and review whether the firm should pursue a product, as well as whether it is capable of doing so.

Revenue reporting will be reorganised into four segments, from three, for greater transparency, and simplify the balance sheet to show assets by business unit.

And the bank commits to increasing its focus on reputational risk management when conducting performance reviews and considering compensation and other incentives.

The move follows criticism from stakeholders and damage to Goldman’s reputation after it was forced to pay $550m (£354m) to the US regulator, the Securities and Exchange Commission, to settle a fraud charge last July.