{"id":317609,"date":"2026-03-02T08:54:11","date_gmt":"2026-03-02T08:54:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/317609\/"},"modified":"2026-03-02T08:54:11","modified_gmt":"2026-03-02T08:54:11","slug":"people-are-complacent-about-risk-of-financial-crisis-says-lloyd-blankfein","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/317609\/","title":{"rendered":"People are complacent about risk of financial crisis, says Lloyd Blankfein"},"content":{"rendered":"

Lloyd Blankfein has one piece of advice for anyone fearing that a financial reckoning is on the horizon: plan like it is coming.\u00a0<\/p>\n

Blankfein, who led Goldman Sachs<\/a> during the 2008 financial crisis, said steering the investment bank was about contingency planning and being brutally honest about what assets are worth.<\/p>\n

\u201cI would be very aggressively marking to market, making people sell certain things that even if they\u2019re liquid, try just to make sure you could,\u201d he told the FT in an interview at his apartment in New York\u2019s Upper West Side.\u00a0<\/p>\n

The comments from Blankfein, 71, come as concerns mount about the economic disruption from artificial intelligence and the underwriting standards at many non-bank lenders, which have proliferated in the past two decades.\u00a0<\/p>\n

He said the lack of a major \u201cshakeout\u201d since 2008 means people \u201caren\u2019t as scared\u201d and had \u201cgot more complacent\u201d.\u00a0<\/p>\n

\"LloydBlankfein said he wanted to demystify Goldman with his new book \u00a9 Olga Ginzburg\/FT<\/p>\n

\u201cThe longer it takes between reckonings, there is a potential for a more severe reckoning,\u201d Blankfein said. \u201cI\u2019m not saying it\u2019s going to happen tomorrow or what direction it comes from. But when something goes off you\u2019re going to find all the assets that have been carried at prices that can\u2019t be realised in the market.\u201d<\/p>\n

Eight years after leaving Goldman, Blankfein is out with a memoir this month, Streetwise: Getting To and Through Goldman Sachs<\/a>. It charts his unlikely rise from Brooklyn public housing to running one of the world\u2019s most important financial institutions. Forbes pegs his net worth at around $1.7bn.\u00a0<\/p>\n

Blankfein said he initially started jotting down his life story for his three children, who grew up surrounded by privilege that would have been unthinkable to a young Blankfein.<\/p>\n

But after getting about a third of the way through, he paused for several years before resuming writing. His wider aim was to demystify Goldman and show that a path to the top is more attainable than people realise.\u00a0<\/p>\n

\u201cI\u2019ve met a few people in my life where they were so smart I couldn\u2019t even figure out how they saw the world,\u201d Blankfein said, naming Elon Musk and Warren Buffett. \u201cBut most of the time, people aren\u2019t that great. They\u2019re just lucky, in the right place at the right time. Worked harder. And maybe even smarter but not smarter of an order of magnitude. Just a little smarter.\u201d<\/p>\n

The longer it takes between reckonings, there is a potential for a more severe reckoning<\/p>\n

Lloyd Blankfein<\/p>\n

Blankfein went to Harvard at 16, and started as a tax lawyer before deciding to move into finance. He was initially rebuffed by Goldman but joined through the back door as a commodities salesman at J Aron, which Goldman acquired in 1981.\u00a0<\/p>\n

Streetwise is written with the biting and self-deprecating humour that Blankfein became known for on Wall Street. He calls his comment in 2009 to the Sunday Times that he was \u201coff doing God\u2019s work\u201d a \u201cLloydian slip\u201d.\u00a0The quip has stuck to Blankfein and Goldman ever since.<\/p>\n

The book is full of detail for Goldman Kremlinologists: the culture clash between upper crust Goldmanites and the scrappy J Aron traders, the squabbling at the top between Hank Paulson and Jon Corzine, partners agonising about taking Goldman public, John Thornton\u2019s no-show leadership following the 9\/11 attacks, and the sudden departures of Stephen Friedman and Jon Winkelried during various crises.\u00a0<\/p>\n

\u201cMost of the time these people are by and large my heroes. And heroes have flaws too,\u201d he says. \u201cNot everybody is wonderful in every context.\u201d<\/p>\n

The main drama in Streetwise is the 2008 financial crisis, a market blow-up that sceptics still feel Goldman contributed to and profited from. Blankfein rejects these accusations.\u00a0<\/p>\n

He took over as Goldman\u2019s chief executive in 2006, after Paulson left to become Treasury secretary in the George W Bush administration. Blankfein writes about his crisis starting in 2007, studying Goldman\u2019s daily P&L while in the cinema watching Live Free or Die Hard. He noticed a decline in a Goldman-managed hedge fund.\u00a0<\/p>\n

That kick-started more than a year of risk management and gut checking of asset prices that Goldman was holding. Blankfein\u2019s view is that the crisis would have been much less severe if more of Wall Street had thought like Goldman.\u00a0<\/p>\n

\"LloydBlankfein took over as Goldman\u2019s chief executive in 2006 \u00a9 Saul Loeb\/AFP\/Getty Images<\/p>\n

Rival investment banks Bear Stearns and Merrill Lynch had to merge with other banks, while Lehman Brothers collapsed in the largest bankruptcy in US history.\u00a0<\/p>\n

\u201cThey wouldn\u2019t have accumulated so many bad assets on their balance sheet to the point that they couldn\u2019t sell them,\u201d Blankfein says. \u201cWhereas we were constantly challenging our traders to sell into the market, to see what the true value and what the market rate was for what they were accumulating.\u201d<\/p>\n

Blankfein largely defends the government response to the crisis as one that was necessary to restore the health of the banking system, even as many average citizens criticised the policies as ones which favoured Wall Street over Main Street.\u00a0<\/p>\n

\u201cThey weren\u2019t trying to bail out [the banks]. They were trying to get the economy righted,\u201d he says.\u00a0<\/p>\n

Blankfein occupies an unusual place in Goldman lore. His legacy is secure through his stewardship during the crisis. But he is an outlier for not having a second act after leaving the investment bank.\u00a0<\/p>\n

His predecessors often transitioned into public service, like Paulson and Bob Rubin as Treasury secretaries or Corzine being elected New Jersey\u2019s senator and then governor.\u00a0<\/p>\n

Blankfein views the timing of his departure in 2018, during the back half of the first Trump term, as not conducive to a government job. He says he was approached over the years about running for New York City mayor but never seriously entertained a bid.\u00a0<\/p>\n

\u201cIn every hive there\u2019s one queen bee that stays long when all the other drones and everything come and go,\u201d he says. \u201cI was that person [at Goldman]. I stayed a long time.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Lloyd Blankfein has one piece of advice for anyone fearing that a financial reckoning is on the horizon:…\n","protected":false},"author":2,"featured_media":317610,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-317609","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/317609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=317609"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/317609\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/317610"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=317609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=317609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=317609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}