Goldman Sachs CEO Lloyd Blankfein spoke at a Bank of America investor conference today, a speaking engagement he’s committed to since 2006.
He had some interest comments on the U.S. economy, the impending Volcker Rule and Goldman’s own accounting practices.
On the economy:
“I don’t think that we can conclude that this slowdown is secular rather than cyclical change…. The world will snap back and it will be a surprise and it will be faster than people think.”
He also said that Goldman’s services are needed now more than ever in the face of a changing world.
Although the investment bank has shrunk its workforce, he doesn’t expect any radical changes to the company structure. “We want to be in shape for the upturn,” Blankfein said.
The looming implementation of the Volcker Rule, which bans banks from trading for profit, has been a very contentious issue lately. The proposed rule has been released for public commenting, and Blankfein said he believes Goldman clients will speak up when they realise how the rule may limit market liquidity and increase the cost of trading.
“In our conversations with clients, they have expressed several concerns on the impact to their businesses,” Blankfein said. [via Reuters]
“As people weigh the costs to themselves, I think the intensity will rise… I think user groups will chime in and make their interests known. In fact I’m sure of it.” [via Bloomberg]
On mark to market accounting:
Mark to market accounting is a way of valuing a company’s assets and liabilities based on market value, different from book value. The Wall Street Journal had reported last week that Goldman and Morgan Stanley may move away from that type of accounting.