A branch of Swiss banking giant Credit Suisse behind a window under the rain, in Basel. (Photo by FABRICE COFFRINI / AFP) (Photo by FABRICE COFFRINI/AFP via Getty Images)
Fabrice Coffrini | Afp | Getty Images
Turmoil in the banking sector will probably weigh on economic growth as lenders become more conservative, former Goldman Sachs CEO Lloyd Blankfein said on Sunday.
“The greater risk environment for financials leads to husbanding of capital and risk-taking, less and more conservative investing and lending, and inevitably, lower growth,” Blankfein, who also served as Goldman’s chairman, told Reuters.
“While some banks have been hung up by poorly managed, concentrated risk, the overall banking system is extremely well capitalized and substantially more tightly regulated than in prior challenging times,” he said.
Blankfein was chairman and CEO of the storied Wall Street firm from 2006 to 2018, steering it through the global financial crisis of 2008 and its aftermath.
He spoke after some of the world’s largest central banks came together on Sunday to stop a banking crisis from spreading as Swiss authorities persuaded UBS on Sunday to buy rival Credit Suisse in a historic deal.
