Newspaper article The Evening Standard (London, England)

Goldman Riding for a Fall If It Doesn't Shift with Times

Newspaper article The Evening Standard (London, England)

Goldman Riding for a Fall If It Doesn't Shift with Times

Article excerpt

Byline: Simon English

IS Goldman Sachs going to change? Should it? During the peak of the financial crisis, it was possible to believe that it thought it should, that it might retrieve its lost motto of being "long-term greedy", rather than chasing every short-term buck going via fast trades, hostile takeovers involving its own clients, or whatever else it fancied.

It had learned a lesson, and from now on customers would come first, second and third. The gigantic trading machine would be reined in and if that meant lower profits from time to time, so be it. The franchise would be protected. Mr Goldman and Mr Sachs would be made proud. "Banking has been good to us," as one executive in favour of toning everything right down once said to me. "We should stick to that."

The trading ethos -- the jam today philosophy -- is personified in present chief executive Lloyd Blankfein, a streetfighting kid from Brooklyn, a trader in heart and brain. He'll retire before long, though not yet, the bank insists.

Who it picks to succeed him will tell us a lot about whether it really intends to become a different company, or whether claims that it has already changed are simply window-dressing. An authoritative piece in Financial News last August had on its list of runners and riders Mike Sherwood, the UK boss who has just been made chair of the banks partnership committee, a position that often leads to the very top job.

It also had John Weinberg, a scion of the Goldman dynasty whose father opposed even taking the firm public, never mind about getting involved in hostile takeovers. Weinberg's appointment would truly signal a shift in direction. Sherwood's would say: "Business as usual -- if clients are unhappy about that, too bad. We're a bank and there's money to be made."

By legend, Goldman guys are supposed to be super-charming, urbane and sophisticated. The ones I've met are more like Fabrice Tourre, "Fabulous Fab" as he called himself, the trader at the centre of allegations the bank sold to clients mortgage investments that were devised to fail. …

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