April 28, 2010 -- Goldman Sachs CEO Lloyd Blankfein sat down with ABC News' Claire Shipman to discuss the tense subcommittee hearings and his outlook on the future of his company.
Claire Shipman: You have spent a lot of time in Washington lately. Do you think that lawmakers know enough about the financial markets to regulate Wall Street?
Lloyd Blankfein: Yes, I think they know enough. And don't forget they've been living with the crisis now and probably have had a better education about Washington then they wanted to have.
Shipman: Do you? Does Goldman Sachs bear any responsibility for the financial meltdown?
Blankfein: Yes we do. It embarrasses me to say it. But of course we do. They financial system failed and Goldman Sachs is a very influential member of the financial system. So we have to share – we have our share of the burden of that.
Shipman: Listening to a lot of the people who work for you and some of your testimony, it seemed to me there was a real coordinated effort not to say certain words like "I'm sorry, I have regrets, I apologize". That there were just certain phrases that people don't want to utter. Wouldn't it just help to just state the obvious? We're sorry, we apologize, yes we... It seems there was just a bit of hedging about.
Blankfein: I don't think that's the case. I think, look, we had different groups, the first panel are four individuals, by the way, two who are out of the firm now, but four individuals really engaged in market making and I don't know if they have been challenged or asked about these issues before. But I think in the senior people you talk to, I think they were very reflective about their responsibilities and their role.
Shipman: Listening to your testimony, you sounded very logical, very much talking about the way business are done. And maybe business is done that way at Goldman Sachs and maybe it does make sense.
But can you see why a lot of Americans would look at a situation where there is a lot of money being made. A lot of glee being expressed as Americans are losing their homes and think there is something wrong with that. Or look at a situation where you hear that, well wait, we knew this deal wasn't great, but we're selling it anyways. That doesn't seem right. It might be legal, but doesn't feel right.
Blankfein: No, look, we're not solving for a minimum. Our firm has been a client-oriented firm for 140 years and, by the way, very successful in an industry where you can't be successful unless you have the support of your clients.
And we have been on the top of that for many years. The way we treat our clients has been with Goldman Sachs for a very, very long time.
Shipman: I'm not necessarily talking about your clients. I'm just talking about Americans at large who look at what happen and for better or for worse say, those investment banks really did not do us any favors. They're blaming you. They don't understand why anybody should profit from something that hurt so many Americans.
Blankfein: I understand that. I understand that reaction. There were things that were taken by people out of context. Look, there were some people, again, in the market making business, there are people who are long and people who are short and people who are making an observation that when something went down they were making money. They could have been – they were expressing a thought about their PNL.
But I tell you, we are all citizens and family people and taxpayers and members of our community. The fortunes of Goldman Sachs, just like the fortunes that we all have as individuals are totally in line with the interest of the public.
There is no Goldman Sachs unless we have the support of our clients, who are the public. Frankly, there is not success for Goldman Sachs unless there is growth, people financing, people will to invest and that is also in line with the interest of the United States.
Shipman: Do you think this all boils down to the fact that Washington and maybe many Americans are just angry at the fact that Goldman Sachs is doing very well when much of the rest of the economy is not?
Blankfein: I think Washington has a responsibility to respond to the events of the last several years by enacting some kind of financial reform. About which we have opinions and others do as well.
That is their responsibility. In connection with that they need to investigate. And that's what these proceedings are all about. So they are, they are doing absolutely the right thing and we are entirely supportive and want to make a contribution.
Shipman: Do you personally, or does your firm feel at times like a punching bag, like a piñata? Do you feel that you are being singled out in any way? Or blamed? The face of what went wrong in Wall Street? Is that fair? Is that unfair?
Blankfein: You know, I think it is not an issue of fair. Because if you bear a burden, it is no relief for you to say other people should have that burden also. It doesn't relieve you.
At the same time I think that we're getting some disproportionate treatment because we surely are not the only financial firm and I think in most of these markets, we were not the largest or even a large participant compared to others.
So I can wish that the focus weren't so disproportionately on us. But I'm not making any claims of unfairness.
Shipman: Why do you think the focus is more heavily on Goldman Sachs?
Blankfein: I'm not sure.
Shipman: Do you think that we're in a different era for investment banks now? In addition to an obligation to shareholders and clients -- there is now a new moral obligation to the American public that you have to think about.
Blankfein: I think there was always that obligation. We've always faced it, of course, after a crisis like this where there's so much distress. Of course. It's that much more intense and we have to be that much more responsive and we will be.
Shipman: Do you see Goldman Sachs fundamentally changing the way it does business?
Blankfein: We are going to examine every element and are in the process and have been for awhile now, examining every element of our business operations and undoubtedly changes will take place.
Shipman: I know this has been a grueling process for you in many ways -- have you at all thought about resigning or stepping down? Has that ever crossed your mind?
Blankfein: No, it hasn't.