Goldman CEO acknowledges company 'role'in finance crisis
Tuesday, 4 May 2010
WASHINGTON, May 3 (AFP): Goldman Sachs' CEO said in an interview broadcast yesterday that his company bears some blame for the real estate bubble that led to the global financial meltdown.
Asked by CNN whether he felt that the company's actions played a role in the real estate bubble that led to the crisis, Goldman chief Lloyd Blankfein answered, "Yes."
"We made a contribution to the bubble," adding that executives at the company now "beat ourselves up" for the error, although he said there was a lot of blame to go around.
"How did we make a contribution? We're a lender. We lent money to companies, we lent, we financed real estate ventures that had too much leverage, we made a contribution to leverage," Blankfein said.
"State and local governments took on debts and deficits, the federal government took on big deficits. All made a contribution to the over-leverage - - and consumers over-leveraged themselves," he said.
"But did we play a role in that? Absolutely we did," he said.
He added: "Did we think we were doing that at the time? No. In hindsight? Yes. Should it have been more clear?" Blankfein asked.
"We beat ourselves up for that."
Goldman has been roundly berated for having emerged a highly profitable winner in the wake of the financial crisis, while many of its investors took major losses.
Asked by CNN whether he felt that the company's actions played a role in the real estate bubble that led to the crisis, Goldman chief Lloyd Blankfein answered, "Yes."
"We made a contribution to the bubble," adding that executives at the company now "beat ourselves up" for the error, although he said there was a lot of blame to go around.
"How did we make a contribution? We're a lender. We lent money to companies, we lent, we financed real estate ventures that had too much leverage, we made a contribution to leverage," Blankfein said.
"State and local governments took on debts and deficits, the federal government took on big deficits. All made a contribution to the over-leverage - - and consumers over-leveraged themselves," he said.
"But did we play a role in that? Absolutely we did," he said.
He added: "Did we think we were doing that at the time? No. In hindsight? Yes. Should it have been more clear?" Blankfein asked.
"We beat ourselves up for that."
Goldman has been roundly berated for having emerged a highly profitable winner in the wake of the financial crisis, while many of its investors took major losses.