Goldman's Level Best

In its latest 10-Q filing, Goldman Sachs says it reclassified at least $17 billion in mortgages and related assets as "Level 3." Those are the sorts that scare analysts because they're the ones no one really knows how to value.

Goldman, one of very few banks that have managed to avoid the write-downs that continue to plague the financial sector, has $96.4 billion in Level 3 assets as of the quarter ended February 29—more than 8 percent of its total assets.

The filing included a couple other worrying bits as well. First, the bank has received requests for information from "various governmental agencies and self-regulatory organizations" on its auction-rate securities dealings. Second, some of those new Level 3 assets came from the commercial mortgage sector; industry watchers hope that area might be immune from the credit slump.