Blankfein Defends Goldman Sachs Against Breakup Advocates Email | Print | A A A By Christine Harper All smiles for Lord Blankfein as Goldman Sachs obtains the benefit of being able to borrow money near zero interest rates (a policy crafted by the FOMC that punishes U.S. savers), and use that money in precisely the same fashion as before the financial collapse in 2007. Nov. 10 (Bloomberg) -- Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said his bank, the nationâs fifth largest, is easier to manage than its bigger rivals, defending the company against regulators and lawmakers who want to break up the top U.S. lenders. âOur business is very complex, and I wonât deny that, but itâs far, far simpler than most of the competitors,â Blankfein, 55, said today at a conference in New York sponsored by Bank of America Corp. âI wonder myself how some of these things get managed.â Politicians and regulators are debating whether last yearâs credit crisis and government bailouts showed that some finance companies had become so big that their failure would put the entire economy at risk. The Obama administration wants to boost the Federal Reserveâs ability to set stricter capital and liquidity standards to reduce that threat, while lawmakers including Bernie Sanders, a Vermont independent, have proposed limiting the size of banks. Simon Johnson, a professor at the Massachusetts Institute of Technology in Cambridge, said in a Bloomberg radio interview today that Goldman Sachsâs assets nearly quadrupled over the last decade. âWhat have we gained from a societal perspective from Goldman Sachs becoming four times bigger? Nothing,â said Johnson, a former chief economist for the International Monetary Fund. âBreak Goldman Sachs up into four pieces, let them choose how they break up.â Investment Banking Goldman Sachs, the most profitable securities firm in Wall Street history, has adhered to an investment-banking business model focused on advising, financing and investing even though it converted to a bank-holding company last year, Blankfein said. âMost of the activities we do, and you can be confused if you read the pop press, serve a real purpose,â Blankfein said. âIt wouldnât be better for the world or the financial systemâ to change the firmâs activities, he said. Goldman Sachs employed 31,700 at the end of September, compared with 281,863 at Bank of America Corp., the largest U.S. bank, and 220,861 at JPMorgan Chase & Co., the second-largest. âWe pretty much stuck to our investment-banking knitting,â Blankfein said. âThatâs why we have 30,000 people and many of our competitors have well over 200,000 or 300,000 people.â Blankfein said that the New York-based firmâs change to a bank under the supervision of the Federal Reserve means that âthere are dozens of people who work for the New York Fed who come to work in our offices every dayâ to provide a check on the companyâs businesses. He said regulatory changes havenât altered any of those activities, such as principal investing or commodity trading, that the firm engages in. âWe havenât suffered from people saying, âDonât do this,ââ he said. To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net. Last Updated: November 10, 2009 11:13 EST