Goldman Sachs Boosts Risk-Taking at Fastest Pace on Wall Street
By Christine Harper in Bloomberg
Goldman Sachs Group Inc., unbowed by the securities industry’s worst year
since the Great Depression, increased its trading bets at the fastest rate on
Wall Street.
Goldman Sachs’s so-called value-at-risk, the amount the New York-based bank estimates it could lose from trading in a day, jumped 22 percent to $240 million in the first quarter, twice what Morgan Stanley stands to lose, company reports show. VaR climbed 2.8 percent in the same period at JPMorgan Chase & Co. and dropped 14 percent at Credit Suisse Group AG.
. . .
Total assets climbed 5 percent at Goldman Sachs to $925 billion in the four months ended March 31, while MGoldman Sachs and Morgan Stanley said last year that they intended to build their base of deposits. Morgan Stanley’s deposits rose 67 percent to $60 billion at the end of March. Goldman Sachs, which had deposits of $27.6 billion at the end of November, didn’t disclose a figure for the end of March.
Blankfein has shown no inclination to change the business model that helped Goldman Sachs set industry records for earnings and pay in 2006 and 2007.
“Nothing that happened this year altered the core of what Goldman Sachs is,” Blankfein told investors at a Nov. 11 conference in New York. “We won’t stop doing the things that made us a leading investment bank.” Trading is such an integral part of Goldman Sachs’s culture that Blankfein has no choice, Huntington’s Sorrentino said.
“Goldman is Goldman because they’ve done that,” he said. “If they can get paid to take a risk, they’ll take it. You don’t get paid for doing safe stuff.” Morgan Stanley’s assets dropped 5 percent to $626 billion.
. . .
Goldman Sachs and Morgan Stanley said last year that they intended to build their base of deposits. Morgan Stanley’s deposits rose 67 percent to $60 billion at the end of March. Goldman Sachs, which had deposits of $27.6 billion at the end of November, didn’t disclose a figure for the end of March.
Blankfein has shown no inclination to change the business model that helped Goldman Sachs set industry records for earnings and pay in 2006 and 2007.
“Nothing that happened this year altered the core of what Goldman Sachs is,”
Blankfein told investors at a Nov. 11 conference in New York. “We won’t stop doing the things that made us a leading investment bank.”
Trading is such an integral part of Goldman Sachs’s culture that Blankfein has no choice, Huntington’s Sorrentino said. “Goldman is Goldman because they’ve done that,” he said. “If they can get paid to take a risk, they’ll take it. You don’t get paid for doing safe stuff.”
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