Goldman reassures Australian clients

Yesterday the local Goldman Sachs venture was distancing itself from the crisis enveloping its US parent, although Goldman Sachs JBWere was assuring clients that none of the structured investment products at the heart of the claims had been marketed in Australia.

Australian shares followed a negative lead from Wall Street yesterday, slumping 1.4 per cent as investor confidence took a hit in the wake of the Goldman Sachs charges.

The heart of claim by the Securities and Exchange Commission was that Goldman did not alert institutional investors, including a German bank, that the fund that designed the collateralised debt obligations was also betting against the product.

Goldman Sachs has said the accusations are "unfounded in law and fact". It also pointed out it lost more than $US90 million on the trading instruments portfolio.

The Australian Securities and Investments Commission is believed to be monitoring local fallout from the trading affair, although local authorities have noted the allegations are said to have taken place in the US.

A spokeswoman for ASIC declined to comment.

Several Australian banks began combing through their giant trading portfolios yesterday to see if they had been exposed to the trading instruments, which have been marketed as Abacus.

Of the local lenders, analysts said National Australia Bank was seen as most at risk, given that it is currently attempting to run down a $13 billion portfolio of trading instruments, which includes exposure to corporate CDOs.

However they pointed out that any losses in the portfolio would have already been felt, because of losses in the US housing market.

NAB declined to comment.