The CEO is betting that regulation won’t kill off the trading business
“Today’s decision is a setback for the environment and for the U.S.’s leadership position in the world.” With those 102 characters, Lloyd Blankfein, chief executive officer of Goldman Sachs Group Inc., introduced himself to Twitter on June 1, taking a swipe at President Donald Trump for pulling out of the Paris climate accord.
No other leader of a big U.S. bank has an official Twitter account. Most avoid taking stands on political issues, aside from financial regulation, on any platform. And Blankfein, the target of public scorn for his company’s role in the 2008 financial crisis, was opening himself up for more criticism. “I felt there was some inevitability to it,” he says, a half-dozen tweets and 40,000 followers later. “In this world, part of my job is to make us understood, because the consequences of not being understood were made quite vivid to me.”
Blankfein’s embrace of a new technology and his willingness to speak out go hand in hand with a strategic retooling as he begins his 12th year as the bank’s leader. If the first act of his career ended with the crisis, and the second covered its aftermath, the third began a year and a half ago with his recovery from lymphoma and his decision to stick around.
His longtime deputy and heir apparent, Gary Cohn, took the cue and left for a job as Trump’s top economic adviser. The decision also prompted questions from some investors and analysts about whether Blankfein can rejuvenate a business that’s struggled to show revenue growth for the past five years and whose trading market share has remained flat as rivals gain ground. Had the thinking at the top gone stale? “They are a boat without an oar trying to navigate choppy waters,” says Brian Kleinhanzl, an analyst at Keefe, Bruyette & Woods. “If you don’t get better banking, better trading, then what are you going to do to improve revenue? I don’t know that they have an answer to that.”
If anyone expected Blankfein’s illness would make him forsake Wall Street, they were mistaken. That was the message he conveyed in his office in January 2016, after 600 hours of chemotherapy and encouraging reports from doctors. Sitting with his feet propped on a coffee table, looking thin in jeans and an open collar shirt, Blankfein said he realized that work was a lovely distraction.
Eighteen months later, Blankfein, 62, has put together a patchwork of growth initiatives: a consumer bank; more resources for asset management, including a lineup of exchange-traded funds; and a heightened focus on lending. Mostly, he’s kept the firm committed to trading, investment banking, and principal investing—putting its own money in deals. That’s fine with the board, according to a person familiar with its deliberations.
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