Goldman chief strides into town
He said global investment banks had a "duty" to help policymakers design post-crisis regulatory regimes, because they could offer expert advice about the consequences of regulation.
Mr Blankfein, who led Goldman Sachs during the financial crisis, is a polarising figure in modern finance.
His bank was a key player in the sale and purchase of complicated financial products that were linked to the US subprime mortgage market. When the market for those products unravelled, it contributed to the financial crisis in 2007.
Mr Blankfein, in Australia to meet investors and staff, spoke at a business conference in Sydney on Friday.
One of the highest-paid executives on Wall Street, Mr Blankfein was ushered into the conference by a team of private security guards.
Sitting on a soft lounge, with candles to provide an elegant backdrop, Mr Blankfein talked about the global economy, the political trauma in the US, and the push to heavier regulation of the finance sector.
He was told that some commentators in Australia saw the political situation in the US as being "almost as dysfunctional as ours".
He responded: "I've been coming here for a long, long time, and during the last two decades of growth, growth, growth, and people are always distraught, overwrought, wringing their hands about how horrible things are.
"To my observation, they don't look that bad," he said to laughter from the audience.
An audience member said Australians were "quite anxious" that the country was out of sync with the US, which had growth - "somewhat anaemic but it is growth" - whereas Australia's economy was slowing and there was a malaise between business and government.
"No, it's awful," Mr Blankfein said. "You've sunk to a level that we're trying to get up to, so my heart goes out to you."
He said investment banks were obliged to help policymakers design a new regulatory regime. "People seem to decry the lobbying of banks ... [but] we have the right, and the knowledge to make forecasts of what the consequences of these things will be."
Mr Blankfein also spoke about investment banks' unique ability to manage risk.
"The best year that Goldman Sachs had ever ... was 2009. Why? That was the year that nobody wanted to take a lot of risk and everybody on the user side had to reorganise their portfolios, and we had the highest market shares we ever would have. I think it enhanced our reputation as being good market makers."
Frequently Asked Questions about this Article…
Lloyd Blankfein is the boss of Goldman Sachs who led the bank during the financial crisis. The article says he was in Australia to meet investors and staff and spoke at a business conference in Sydney.
Blankfein told the audience that, despite a 'very poisonous' political environment in the US, the world has been well served by Ben Bernanke's handling of the financial crisis.
He described the US political environment as 'very poisonous' and spoke about political trauma, saying people are often distraught about economic conditions even during long periods of growth.
The article says Goldman Sachs was a key player in the sale and purchase of complicated financial products linked to the US subprime mortgage market, and when that market unraveled it contributed to the financial crisis in 2007.
Yes. He argued that global investment banks have a 'duty' to help policymakers design post‑crisis regulatory regimes because they can offer expert advice and forecasts about the consequences of regulation.
Blankfein said 2009 was the best year Goldman Sachs ever had because few others wanted to take risk, they reorganised portfolios, and Goldman achieved its highest market shares — enhancing its reputation as a strong market maker. He also spoke about investment banks' unique ability to manage risk.
The article notes he was ushered into the conference by a team of private security guards and mentions he is one of the highest‑paid executives on Wall Street, explaining why he was a high‑profile figure requiring security.
When told some Australians felt out of sync with the US, Blankfein joked that Australia was 'awful' and had 'sunk to a level that we're trying to get up to,' after an audience member raised concerns that Australia’s economy was slowing while the US still had some growth.
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