Everyone with any connection or past in the financial industry is weighing in on the Greg Smith resignation letter that has rocked Wall Street since Wednesday morning. This morning, former AIG Chairman Hank Greenberg was on Bloomberg TV to do the same.
Greenberg discussed his opinions on the cultural changes—a contentious issue that Smith pinpointed as one of his key reasons for leaving the firm—inside Goldman Sachs with anchor Betty Liu.
“I think that change came about after John Whitehead and John Weinberg were co-CEOs,” he said. “It was a partnership, the partners had their own capital in the business. They represented their client, that was their main function. When they went public, capital came out, the partner’s capital came out.”
In pinpointing the firm going public as a key event in the changes within Goldman, Greenberg echoed what many other financial professionals have said over the course of the last day. In addition, Greenberg pointed to the influx of traders and the firm’s shift to focus on trading over pure investment banking as another catalyst in effecting change.
“They had to make some earnings-per-share expectations, that was a change in culture, and then it continued on,” he said. “And you didn’t have investment bankers running the firm, you had traders. And traders have a short-term memory and a short-term look at things.”
Video of the interview below: