Bloomberg News

Goldman Serves Crucial Physical Commodities Role, Blankfein Says

September 18, 2013

Goldman Sachs Group Inc. (GS:US)’s physical commodities unit is a “core” business that provides a crucial service to clients, Chief Executive Officer Lloyd C. Blankfein said today.

“The role we play in that business is very, very important to users in the market,” Blankfein, 58, said in an interview with CNBC. “Without us in that market, a good credit, a regulated company, the outcomes won’t be very good for the users of the market.”

U.S. lawmakers have questioned whether banks should be allowed to own physical commodities businesses and the Federal Reserve said it’s reviewing a decision it made a decade ago that allowed commercial banks to enter the industry.

Goldman Sachs hasn’t been pressured by regulators to exit its physical commodities units, Blankfein said. The New York-based firm is in a different position than some commercial banks because Goldman Sachs was already in the commodities business when it became a bank holding company and didn’t need approval from regulators later on, he said.

Blankfein worked in the firm’s J. Aron commodities unit, which also produced Chief Financial Officer Harvey M. Schwartz and President Gary D. Cohn.

“That is a core, strategic business for us,” Blankfein said. “Commodity hedging is no different to people who have risks in the commodities markets -- which are real, iconic American companies -- as their credit risk or interest-rate risk. And we provide that service.”

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Christine Harper at charper@bloomberg.net


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • GS
    (Goldman Sachs Group Inc/The)
    • $176.82 USD
    • 1.80
    • 1.02%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus