Goldman Sachs continued a rather dismal bank reporting season when it announced a third-quarter loss of $428m. While other Wall Street firms made a profit, their headline numbers were flattered by arcane accounting rules.
These saw Citigroup’s $3.8bn net income bolstered by a $1.9bn gain based on the bank’s widening credit spreads, and JPMorgan’s results boosted by $1.9bn. Without the same valuation adjustment, Morgan Stanley’s institutional securities division would have reported third-quarter net revenues of $3bn instead of $6.5bn.
