Actually the comment I was responding to was about "running a tight shop" -- which is about operational integrity in general (not just on the matter of unhedged risk).

In the, you know, "would you buy a used car from these guys?" sense.

Perhaps a difference of definition but I don't consider a tight shop to have anything to do with morals or integrity. Tight shops I always considered efficient and optimized. Car dealerships are shady, but they can run a tight shop.

The only reason GS is still around is because they did what they did. They protected their shareholders the fine is trivial (less than 10%) compared to the losses they would have taken if they followed the course of action that everyone else did.

A $13b bailout on suspiciously favorable terms had something to do with it, also.

What is suspiciously favorable about it? the terms were uniform. The real kick back to all banks was the unwind of AIG.

Yep and? Every IB had to secure a deal GS got money from Berkshire Hathaway, everyone else got acquired Lehman could not secure a deal. Unlike in every other deal government was not providing downside guarantees for Berkshire Hathaway investment in GS. Government did provide huge guarantees to JPM and every other bank that acquired an IB.

Absolutely right! Its usually context specific.

Operational integrity for investment bank is to a very significant degree risk management. Integrity as in having control over something not in a moral sense. In the case you referenced I'd rather see GS's counterparties taking more blame. The whole we are poor guys running multi-billion dollar funds and charging millions in fees didn't do due diligence and want to blame someone else thing is pure BS.