GUEST COMMENT: There are plenty of mediocre bankers at Golden Sacks

I'd like to make a confession: I once worked at Goldman Sachs. Does this make me a money grabbing, elitist, higher performer? I like to think not. It does, however, mean that I'm viewed with a degree of admiration by all the people who'd like to have worked there, but haven't.

I have plenty of stories to tell - colleagues who were almost thrown out for trips to strip clubs, children of prominent politicians who were apparently shooed through the interview process for their connections. I learnt a lot and met some genuinely smart and driven people. I was also surprised to find that there are plenty of mediocre bankers at the firm- despite its policy of removing the bottom layer each year. Goldman breeds loyalty and big egos, by making people believe that it is a cut above the rest. I've noticed that even friends who have left GS are still wistful about their time at the firm.

The infamous Lloyd Blankfein interview in the Times makes an interesting point. Namely, that Goldman takes top performers, the brightest & the best - and make them feel B grade. It undoubtedly pays top performers well, but I've often wondered if they are subsidised by the bottom 89%, who are happy to take a haircut for the prestige of working at the 'best investment bank'.

Goldman engenders a culture of entrepreneurialism. The firm's ability to invest profitably for its own account is well-known. Even flow traders are encouraged to take substantial P&L risks.

Many believed the firm was on the verge of bankruptcy in September 2008. Instead it became a bank holding company to access cheap government funds. Some point to Warren Buffet's investment at this low point (despite being badly burnt on Salomon Bros in the 1980's) as an endorsement of its continuing ability to make profits - why else would he have invested $5bn in the firm? However the preference shares he owns have almost first call on profits the company makes.

If you're working at Goldman, the real reward comes after you leave. Successful Goldman alumni are abundant in the most successful hedge fund and private equity shops. Many top performers have struck out to start their own firms and raising investor money is a lot easier if you have a track record of profitability - a Goldman Midas Touch.

Goldman is a well-oiled money making machine. So what that partners are getting their bonuses capped at 1m this year? I suspect the firm will find a way of remunerating its people well neverthelss, and that it will also find a way of avoiding the Volcker Rule, if it is enforced. Don't be surprised if Goldman even finds a way to strengthen its position in a post-Volcker world.