He'd
know – he probably engineered it.
The EU - "I'm rooting for it to work." - for Goldman Sachs!
Goldman
Sachs CEO Lloyd Blankfein: Company Engaged in Contingency Planning
for Defaults in Europe
Goldman
Sachs is preparing for possible sovereign defaults in Europe, the
company's CEO said Friday
8
June, 2012
"It's
in the nature of contingency planning and we plan for a number of
contingencies" including defaults, Lloyd Blankfein said Friday
after testifying in federal court at the insider trading trial of
former Goldman director Rajat K. Gupta. "If it does happen, it
would be irresponsible for us not to engage in contingency planning."
Blankfein
did not go into detail about the kind of planning at Goldman Sachs,
but said that the firm does not want to be caught by surprise if, for
example, a country like Spain defaults on its sovereign-debt
obligations. "If there's a shock and awe [situation], there may
be awe but there won't be shock."
In
February, it was revealed that Goldman sold $142.4 billion in credit
default swaps that would pay out in the event Greece, Ireland,
Portugal or Spain defaulted on its debt. Goldman also purchased swaps
on the same debt worth an estimated $147.3 billion in all, according
to Bloomberg.
Blankfein's
comments echoed remarks he made at the end of his testimony at the
Gupta trial earlier this week. Both the public and private sector are
laying the groundwork for responses to defaults, Blankfein said
Thursday, but stopped short of confirming outright that Goldman is
preparing as well.
"This
is a very big test for the EU as a concept," Blankfein said
Thursday. "I'm rooting for it to work."
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