Abigail Hofman: Time for Blankfein and Cohn to exit the Goldman stage
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Opinion

Abigail Hofman: Time for Blankfein and Cohn to exit the Goldman stage

For a while now, I have commented that the Goldman brand is broken. Don’t forget that a lot of senior people are leaving the firm. Think: Ed Eisler, David Heller, Chris Barter and Raj Sethi. This exodus reflects the fact that investment banking is no longer much fun or extremely well paid.

But one thing is clear to me. This slippery slope has to stop, and stop right now. Unless the Goldman board acts decisively, Goldman risks become one of America’s fallen-angel iconic companies. Whether it’s the Abacus deal, or the alleged insider trading of former board member Rajat Gupta, or the "vampire squid" and "muppet" media attacks, Goldman Sachs is not working.

One thing is clear to me. This slippery slope has to stop, and stop right now. Unless the Goldman board acts decisively, Goldman risks become one of America’s fallen-angel iconic companies 

And there is no room for complacency. Previously Goldman earned so much money that it was untouchable. That is not the case today, along with much of the rest of the financial services industry. For the 2007 financial year, Goldman reported net earnings of $11.6 billion and an incredible return on equity of 32.7%. Four years later, in 2011, net earnings were $4.4 billion and the ROE was a meagre 3.7%.

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