by Leonard Doyle

"In Goldman Sachs we trust," was the title of one of the chapters of John Kenneth Galbraith's The Great Crash, his account of the crooked dealings that triggered the great stock market bust of the 1920s.

President George Bush will not have had that unflattering chapter in the Wall Street bank's history in mind as he nominated Robert Zoellick to head the World Bank yesterday.

Mr Zoellick, 53, is a senior executive of Goldman Sachs, who until recently was the deputy US Secretary of State. Before that he was the US trade representative, where he dealt abrasively with "globalisation nihilists," as he described opponents of American trade policy towards the developing world. World reaction to his nomination was broadly positive, but France's foreign minister Bernard Kouchner said Mr Zoellick must move swiftly to restore confidence in the World Bank's role in rolling back poverty. "Between the partners and the World Bank it is mainly a question of confidence."

President Bush's nomination of another Goldman Sachs senior executive is unsurprising given that the bank enjoys virtual revolving door access to the White House. Last year the Wall Street bank raised eyebrows when it handed its employees a $500m (£250m) bonus, or $623,400 for each one. The chief executive was given an extra $52m spending money.

At the World Bank he will have to quickly apply balm to the raw wounds caused by the forced removal of Mr Bush's neoconservative ally Paul Wolfowitz. Those wounds were still in evidence as Mr Bush went out of his way to thank Mr Wolfowitz, while he lavished praise on Mr Zoellick's record as a diplomat and trade negotiator. Mr Wolfowitz left under a cloud after pressing for a large compensation deal for his girlfriend Shaha Riza, who also worked at the bank.

But for all the honeyed words about Mr Zoellick's role in reuniting the two Germanys, and bringing China into the World Trade Organisation, it is his hardnosed reputation as a free trade zealot that precedes him at the World Bank.

While calling for a "level playing field" and demanding open markets for American goods in the developing world, the US still subsidises agriculture to the tune of $8bn a year. Development economists say that the combination of subsidies on US cotton, corn and wheat in particular devastate the economies of African countries. The bank's 24-member board, which is dominated by European donors, must now approve the appointment. In a statement, the board said that it was essential that the next president, among other things, have "political objectivity and independence".

The bank's new chief needs to quickly persuade countries to contribute nearly $30bn to fund a high profile programme of providing interest-free loans to the world's poorest countries.

"The test of Zoellick is whether he manages to turn around the bank, which has been in huge disarray," said Elizabeth Stuart, a senior policy adviser for Oxfam International.

Favourite bank

Robert Zoellick

The World Bank nominee is formerly a deputy to Condoleezza Rice. He was a key diplomat in Washington's China policies before joining Goldman Sachs as managing director and vice-chairman for international strategy.

Joshua Bolten

The White House chief of staff is also a former Goldman Sachs executive.

Robert Rubin

The former United States treasury secretary is a former partner with Goldman Sachs.

Jon Corzine

The governor of New Jersey was co-head of Goldman Sachs with Mr Paulson until he left due to a power struggle.

Henry Paulson

The US Treasury Secretary was formerly Goldman Sachs' chief executive. As a China expert for Goldman Sachs, he helped to manoeuvre the investment bank into pole position in China as the country joined the World Trade Organisation.
© 2007 Independent News and Media Limited