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Sideways: Goldman’s new cast members aren’t contenders for the top

Goldman Sachs had a logical, humdrum reason to acquire $16 billion of deposits from GE Capital to boost its fledgling online retail operation, GS Bank.


Deposits are treated more favourably than repos or other sources of wholesale funding under new global liquidity regulations, and Goldman remains light on deposits compared to rivals – not just the big US universal banks, but also its traditional closest peer Morgan Stanley.

Goldman nevertheless managed to attract enormous attention for an unexceptional move into online retail banking.

This represented an ongoing attempt to convert its notoriety as the popular symbol of Wall Street excess into a positive factor, rather than simply countering the steady flow of negative coverage for the firm.

The online retail push fits well with Goldman’s relentless promotion of the idea that it is now a technology firm as much as a bank. Harit Talwar, a former president of credit cards at Discover, who was hired by Goldman to run online lending, is being presented as the face of the retail initiative.

He joins Marty Chavez, chief information officer, as the manager currently permitted the most media oxygen by a notoriously controlling administrative bureaucracy within Goldman that is known internally as the ‘Federation’.

Talwar and Chavez have an obvious appeal as faces of Goldman 2.0, the exciting new tech entrant. Talwar is a recent hire so he cannot be tied to past malpractice.


Chavez is an enthusiastic advocate of the possibilities for technology to transform finance. He is an experienced Goldman executive who worked mainly in equities, one of its less controversial business lines. Chavez also has an appealing personal background, as an openly gay, Latino executive who is willing to discuss the challenges facing minorities on Wall Street in press interviews.

A bonus for Goldman is that Talwar and Chavez are unlikely to feature in any debate over the succession to chairman and CEO Lloyd Blankfein.

Goldman, like most large companies, likes to create the impression that it has a variety of senior managers capable of taking strategic responsibility – a deep bench is the usual phrase. This has caused problems when it allowed certain managers to take a higher media profile, however.

Gary Cohn, president and chief operating officer of Goldman Sachs

Gary Cohn, Goldman

Both Michael Evans, a former head of Asia, and Tim Leissner, the banker who oversaw controversial trades with Malaysian clients, effectively went rogue in recent years. Evans challenged president Gary Cohn for the role of heir apparent to Blankfein, before being pushed out of Goldman in 2013.

Leissner turned from a mildly embarrassing feature in gossip reports due to his appetite for socialising, and marriage to former model and entrepreneur Kimora Lee Simmons, into a source of potentially greater reputational harm to Goldman as a series of curiously lucrative deals with Malaysian clients came under scrutiny.

With Evans gone and the securities co-heads at Goldman keeping an extremely low profile as their business struggles to regain its footing, Blankfein and Cohn can now plan a transfer of power on their own terms.

Blankfein’s recent bout of lymphoma could have given him good reason to hand over the reins, but he appears to wish to step down at a time of his choice. A natural desire to leave on a high might argue for a departure date beyond what is looking sure to be a poor 2016, but after 10 years as CEO Blankfein is nevertheless presumably in the final stretch of his stint running Goldman.

If and when Cohn does finally take the top job it will be interesting to see how long he lasts. To apply a British political analogy to an American bank, it is tempting to see Cohn as an abrasive Gordon Brown-like successor to Blankfein’s more charismatic Tony Blair-style figure. If that analogy holds, Cohn’s reign may be marked by conflict over divisions that were masked by a more popular predecessor, followed by a move in a different direction by the stakeholders of Goldman Sachs.

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