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Lloyd Blankfein: Goldman pays the price of success

Assailed on all sides for preparing to pay huge bonuses from a financial market kept alive by systemic government support, Lloyd Blankfein is having to fight Goldman’s corner almost as fiercely as when the crisis was at its worst. He tells Peter Lee that it is not business as usual.

EVEN THOUGH THE firm is in the middle of a media blitz to justify its so-called social purpose and defend itself against a swelling army of enraged critics, Goldman Sachs postpones

Euromoney’s meeting with chairman and chief executive Lloyd Blankfein.

There’s a good reason. On Monday November 2, Blankfein is hauled instead to the offices of the Federal Reserve Bank of New York for a dressing down from president William Dudley on the vexed question of compensation.

John Mack of Morgan Stanley and Jamie Dimon of JPMorgan receive the same summons. Independent directors who chair their boards’ compensation committees accompanied all three CEOs on the walk of shame.

Americans, scared at the prospect of rising unemployment in a country with the thinnest of social safety nets, are consumed with fury at the financial industry for what they see as its role in promoting an irresponsible borrowing binge that almost destroyed the financial system itself, throwing the economy into recession and millions out of work. They are scornful at their political leaders for bailing out the culprits and seething at the return of large bonuses for bankers who have profited from re-equitizing the same financial institutions and corporations they levered up in the first place.

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