Lloyd Blankfein: Same CEO, Different Goldman Sachs
June 08 2018 - 9:29AM
Dow Jones News
By Liz Hoffman
A decade after the financial crisis, The Wall Street Journal has
checked in on dozens of the bankers, government officials, chief
executives, hedge-fund managers and others who left a mark on that
period to find out what they are doing now. Today, we spotlight
Goldman Sachs CEO Lloyd Blankfein and former Citigroup executive
and Treasury Secretary Robert Rubin.
Lloyd Blankfein took the stage of New York's Mandarin Oriental
hotel ballroom last December and addressed the hundreds of Goldman
Sachs Group Inc. alumni assembled for their annual dinner.
"This is my 12th time addressing this group," Goldman's CEO
said. "But don't get your hopes up. I'm staying -- at least through
the end of dinner," he added, to laughs.
Almost alone among figures who made headlines during the
financial crisis, Mr. Blankfein is exactly where we left him,
running Goldman -- for now. The Wall Street Journal has reported
that he is likely to step down by year-end, and he recently tapped
lieutenant David Solomon as his successor, bringing some clarity to
what had become finance's favorite parlor game.
He will leave a firm dramatically changed by the crisis,
undeniably on stronger footing but searching for a clear identity
in the new banking landscape.
In 2007, Mr. Blankfein was a year into the role, running the
most ruthless and profitable firm on Wall Street. A former tax
lawyer whose quarter-life crisis brought him to finance, Mr.
Blankfein rose to power by pushing Goldman's traders into riskier
territory. That year, he got a $68 million bonus.
Today, that high-octane risk-taking has been tamed by regulation
and market forces, sending Goldman and its longest-serving CEO into
unfamiliar territory in search of growth.
The firm in 2016 launched Marcus, a buzzily named consumer bank
that makes small loans online. It is embracing simpler, fee-based
businesses like corporate lending and asset management as
traditional moneymakers like trading commodities and underwriting
stock sales become less profitable.
Mr. Blankfein, who decades ago turned heads for a
multimillion-dollar winning bet on the U.S. dollar, last year
called a few Marcus borrowers to thank them personally for their
business. He sorts weekly through email complaints that make their
way to his inbox.
On his watch, Goldman has raised deposits and now relies less on
the short-term borrowing that left it dangerously exposed in 2008.
Nearly all the traders who engineered the mortgage-derivatives bets
that threw Goldman into the political fire after 2008 have left.
While that has helped Goldman carefully rebuild its image, revenue
has flatlined and profitability has fallen.
It isn't clear what Mr. Blankfein will do after leaving the job.
His two immediate predecessors as Goldman CEO became Treasury
secretary, a path that seems less open to Mr. Blankfein. Some New
York City politicos have urged him to run for mayor, according to
people familiar with private conversations. Friends say he is
flattered but uninterested.
He may also remain on Goldman's board temporarily after stepping
down as CEO, people familiar with the matter have said.
Write to Liz Hoffman at liz.hoffman@wsj.com
(END) Dow Jones Newswires
June 08, 2018 09:14 ET (13:14 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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