Goldman Sachs CEO: Trump Not a Dangerous President
Contrary to fears in Europe, Donald Trump will not be a “dangerous” U.S. president, said Lloyd Blankfein, the president and chief executive of America’s second-largest investment bank, Goldman Sachs, in an exclusive interview with Handelsblatt.
Asked whether Mr. Trump, who has proposed building a wall along the Mexican border and stopping the flow of Muslims into the United States, would be “dangerous,” the 62-year-old Mr. Blankfein sounded confident that Mr. Trump, despite his rhetoric, will be a pragmatic leader.
“I don’t think so,” Mr. Blankfein, who supported Democratic presidential candidate Hillary Clinton, said in an interview earlier this month at the Hotel Adlon in Berlin. “He’s a very smart guy, a businessman…I am not pessimistic at all because he won.”
As an investment bank, Goldman Sachs is in the risk-management business, Mr. Blankfein said, and Ms. Clinton, a known quantity, was a more easy choice for financiers like him. But “Mr. Trump may turn out to be a much better president than anyone else might have been in that place,’’ he added. “He’s just less of a known quantity as a politician.”
While he voted for Ms. Clinton, and contributed to her 2008 campaign, Mr. Blankfein said he learned this year from Mr. Trump’s communication skills and his ability to see “things that other people didn’t see.” In the heat of the campaign, Mr. Trump also criticized Goldman Sachs as an example of Wall Street excess.
Mr. Blankfein said the remarks didn’t bother him: “That was the rhetoric in the heat of the political battle; I didn’t take this personally,’’ he said. “It wasn’t specifically limited to Donald Trump; it also came from the Democratic side. When people think of finance, they think of banks, mostly investment banks, and to some extent, Goldman Sachs. This is sometimes favorable to us and sometimes a burden.’’
If Mr. Trump’s policies contribute to faster U.S. economic growth, Goldman Sachs will benefit, he said.
“In general, if there are policies that are more stimulative, our fortunes rise along with that,’’ he said. “The declared policies of Mr. Trump are therefore a good thing.’’
Mr. Blankfein said he would consider being part of a Trump administration, but stressed no one had reached out to him, and he didn’t expect anyone to do so. Mr. Trump has named a former Goldman banker and hedge fund manager, Steven Mnuchin, as his nominee for U.S. Treasury secretary.
Goldman has supplied three of the last eight U.S. treasury secretaries from its pool of bankers or its alumni network. Ironically, Mr. Blankfein said the appointment of another ex-Goldman alum may invite more scrutiny of the bank in Washington.
The U.S. banking industry let the public down during the 2008 crisis, Mr. Blankfein said.
“We were in a bad place because the industry failed at one of its most important purposes, which was to provide stability and to do things the right way,’’ Mr. Blankfein said. “I’m not the representative of the entire industry or its apologist.’’
Goldman, because of its size and influence, came in for special criticism at the time.
“I’m not saying we were selected out of thin air,’’ Mr. Blankfein said. “Some of the rhetoric reached a pitch that felt unfair. But there were real problems, some of which were imposed by cataclysms and circumstance, and some of which were self-inflicted. They were sorted through and now the entire environment has shifted.’’
Some new government banking regulations imposed on Goldman Sachs and other banks after the crisis have hampered the industry, Mr. Blankfein said, and even before Mr. Trump’s election, momentum was building to roll back some of the most onerous requirements, like the Volcker Rule.
“It probably would have come without Mr. Trump, but with him it will probably be accelerated,’’ he said.
The Volcker rule, adopted in 2010 and named after the former Federal Reserve chairman, Paul Volcker, prevents commercial banks from owning or investing in hedge funds and private equity funds. Bankers have criticized the rule as an unneeded intervention in the market.
On the effect of a Brexit on Europe’s banking scene, Mr. Blankfein said the ultimate consequences will have to wait for the terms of the deal between Britain and the European Union.
Britain has the potential to remain the most important financial hub in Europe after Brexit, he said, if the terms are favorable to it. Likewise, Frankfurt and other continental hubs could gain if there is an incentive for finance companies to relocate to the European Union. This too will depend on the deal, he said.
Goldman Sachs is weighing several scenarios for the future of its London hub, and could conceivably move some assets and functions to the continent if the terms of the Brexit deal make such a move wise and necessary, he said.
Read the full interview in Handelsblatt Global at 8 p.m. Central European Time.
