Contrary to this story, the issues here go far beyond the impact of the fine on quarterly earnings. It is the relationship of the fine to the harm caused and the reasons — if any — to believe the bank is now set up to prevent future violations. Still the magnitude of the fine is worth noting.
[Goldman Sachs] said on Thursday that it will pay a $5 billion settlement related to residential mortgage-backed securities it sold between 2005 and 2007.
Under the terms of the settlement, Goldman will pay a $2.385 billion civil monetary penalty, make $875 million in cash payments, and provide $1.8 billion in consumer relief.
The bank also said that its fourth-quarter earnings results will be reduced by approximately $1.5 billion. To put that in perspective, analysts had been expecting the bank to report net income of $1.63 billion.