First step: admission

Goldman: Even the mighty Goldman Sachs makes mistakes. The Wall Street bank’s decision to help Greece keep some of its debts hidden from public view in 2001 was one of them.

The transaction allowed the Greek government to present accounts which understated the state’s liabilities by 1.6 per cent of GDP.

The arrangement was not illegal, not against any regulations and was approved by Europe’s statistical authorities. Still, helping a client lessen the transparency of its finances is ethically questionable. For its own sake, Goldman should just admit that the firm compromised the principles it is supposed to hold dear.

At the time, it may have seemed that the deal's goal, comforting Greece’s fellow members of the euro zone, justified the means. In retrospect, though, it’s hard to reconcile such financial alchemy with Goldman’s expectation that its people comply fully with the “letter and spirit of the laws, rules and ethical principles that govern us”.

There are, to be sure, mitigating factors. Goldman, which carefully considers the ethical and reputational risks of individual transactions, wasn’t alone. Other banks helped governments take advantage of the European Union’s weak fiscal governance. But, Goldman regards itself as the global standard setter, demanding “high” ethical standards of its people, and eschewing the practices of the crowd.

Similarly, it can be argued that Goldman followed its overarching business principle that client interests always come first. It certainly remained faithful to another tenet: that the firm should strive for creativity. It’s also true there have been almost no complaints about this transaction until now.

Such considerations help explain why a senior Goldman executive said the Greek deal was not inappropriate — and why Goldman posted a dry explanation of the deal on its own website. That’s all in tune with Goldman’s general post-crisis message: We have done little wrong and many of the attacks directed at us are sour grapes.

Outsiders are much more critical — a fact that Goldman ignores at its peril. Even Ben Bernanke, the generally pro-Wall Street Federal Reserve chairman, has raised questions about Goldman’s role in the Greek pastichio.

Humility may not come easily to Goldman, but it can be the most creative, and effective, response to criticism. Goldman’s longer-term interests would be best served by admitting that on this occasion, dedication to client service and creativity got the better of its judgment, something it won’t let happen again.

Such an admission wouldn’t reflect well on Goldman’s client, the Greek government. But, the fact that Greece fudged its finances is hardly under debate. At the very least, Goldman could admit that it should, with hindsight, have advised against the deal.