Blankfein says worst of financial crisis may be over

DAVOS - Goldman Sachs Group Chief Executive Officer Lloyd Blankfein said the worst of the financial crisis may have passed.

By Christine Harper (Bloomberg)

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Published: Sat 26 Jan 2013, 9:55 PM

Last updated: Fri 3 Apr 2015, 5:03 AM

“My investing self tells me that the worst is over by far,” he said at a panel discussion at the World Economic Forum in Davos on Friday. Still, risks remain that “might yet disappoint us”.

Blankfein, who took part in a panel discussion on competitiveness, said he feels the world has overcome a lot of problems that weighed down markets and economic growth in recent years.

“We’ve chewed through a lot of the problems and I would say my investing self tells me that the worst is over by far,” he said. Still, he urged “caution because this wouldn’t be the first time that I’ve suggested the worst was over, only to find out that there was a bit of a relapse.”

Blankfein also responded to a question on the bank’s decision earlier this month not to postpone bonus payments to some London-based employees to help them benefit from a lower tax rate. The firm decided against the delay after media reports and criticism of the potential move by politicians and Bank of England Governor Mervyn King.

“We’re a business that deals with the public, public opinion is important to us,” he said. “We live in the world and we have to take account of it.”

He said that it’s “healthy” for the UK to debate its membership in the European Union even though an exit from the bloc wouldn’t be good for the country.

“It would be detrimental to the UK to leave the European Union,” he said. “I don’t find the debate detrimental.”

UK Prime Minister David Cameron’s pledge last week to hold a referendum by the end of 2017 on whether Britain should stay in the 27-nation union has been viewed by some business people and economists as a risk to investments because of the uncertainty it would create.

Blankfein, whose company is the fifth-biggest US bank by assets, said that he regarded the UK’s role in the EU as a “simmering issue” that needed to be openly discussed.

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