It's not so much that Goldman Sachs (GS) is favored by regulators, but that it is seen by the public as favored by regulators. And that's precisely what drove the Fed to withhold names of AIG (AIG) counterparties back in December 2008, when the media requested names, according to an internal New York Fed email reported on by Bloomberg.

The New York Fed was also sensitive to how the public would react to counterparties being paid 100 cents on the dollar. They had reason to fear--as we all know now. Conspiracy theorists will still paint this as an issue of Goldman's cronies in government doing it a favor. But it seems more like a lapse in judgment. 

There's also tinge of "the public can't understand this" that's a bit troubling. In this case, sunshine would have been a decent disinfectant. Not that a furor would not have erupted, but it would have come across as less sleazy. 

For more:
- here's the article

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