Goldman Sachs Ducks Behind Sandbags as Sandy Aims at NYC
Banks shifted duties to other cities and had some New York- based employees working at home as exchanges closed so financial industry employees wouldn’t risk their lives amid the largest Atlantic tropical storm system recorded. Sandy forced the halt of subways and the interruption of electricity, and U.S. stock trading was canceled yesterday and today, the first time weather caused consecutive days of shutdowns for exchanges since 1888.
Predictions of an 11-foot storm surge prompted Goldman Sachs to stack sandbags around its West Street office in Lower Manhattan, home to some of the world’s largest financial firms, as the city ordered downtown neighborhoods evacuated. Partial shutdowns included offices of the nation’s three biggest banks, JPMorgan, Bank of America Corp. (BAC:US) and Citigroup Inc. (C:US)
“We operate in 60 countries (JPM:US) and have these types of events happen outside the U.S. more commonly than they do in places like New York,” said JPMorgan co-Chief Operating Officer Frank Bisignano in a Bloomberg Television interview with Erik Schatzker and Stephanie Ruhle. “We’ve seen tsunamis in Asia, we’ve seen floods in India and managed through volcanoes in Chile. Until the event occurs, you really don’t know the impact on your business.”
Fixed-income trading at Goldman Sachs was mostly limited to money markets and ensuring clients had funding they needed to meet obligations that are coming due, said a person familiar with the bank, who declined to be identified because the information is private. Plans may be the same today, according to the person.
Goldman Sachs is counting on employees in locations including London and Salt Lake City, with the West Street office scheduled to be closed today, according to a memo from Chief Administrative Officer Jeffrey Schroeder.
Consolidated Edison Inc., New York City’s utility, said late yesterday it was cutting power to parts of lower Manhattan as flood waters threatened underground electrical systems. The cuts affected more than 5,000 customers, the utility said.
JPMorgan, the biggest U.S. bank, closed all buildings and branches in New York’s Zone A, the mandatory evacuation area, the four main heads of retail and mortgage operations said in an e-mail to the bank’s 160,000 retail employees. Bisignano said in the interview the New York-based company has about 35,000 people who may be affected by the storm.
While some trading still occurred, “it was a very light day, I mean very, very light,” Bisignano said. “Even though there’s fabulous remote ability by every company in this industry, including by our clients, you saw most people focused on safety at home.”
More than 20,000 of Morgan Stanley (MS:US)’s employees used remote connections to work from home, according to a staff memo from Jim Rosenthal, chief operating officer of the New York-based investment bank.
Citigroup’s main U.S.-based trading office at 388-390 Greenwich Ave. is included in New York’s mandatory evacuation order, as are some branches and an office at 111 Wall St., according to the bank.
Bank of America (BAC:US), the second-biggest U.S. lender by assets, said it closed its offices at Two and Four World Financial Center as well as all of its New York City branches and Merrill Lynch wealth-management offices in New York and the mid-Atlantic markets.
American Express Co. (AXP:US), the credit-card lender with headquarters in Lower Manhattan, will shut all its offices in the tri-state region today, the second straight day of closures, a spokeswoman said.
European-based firms including Deutsche Bank AG (DBK), Credit Suisse, UBS AG (UBSN) and BNP Paribas SA (BNP), which have offices outside of the mandatory evacuation zone, made arrangements to provide transportation and hotels for workers.
UBS booked hotels for staff in Manhattan, Stamford, Connecticut, and Weehawken, New Jersey, according to Karina Byrne, a spokeswoman at the Zurich-based bank. Paris-based BNP Paribas told all non-critical workers to work from home and is providing hotel rooms for staff who are reporting to the office, said Cesaltine Gregorio, a New York-based spokeswoman.
Societe Generale SA (GLE), France’s second-largest bank by market value, told most of its staff in New York City and New Jersey to stay home, said Jim Galvin, a spokesman for the Paris-based bank.
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