People who stay at such levels aren’t naïve about the power that comes with the global financial system. “Can you make an argument for the instrumentality of finance to be always neutral and just a utility? Here, they couldn’t,” he said of the response to Russia, “because it was just too much of a violation, too public, too well known, too distributed because of social media, too one-sided.” Blankfein rose through the ranks of finance through a career as a trader, placing bets on the winners and losers on the global stage through oil and currency trades, using both sharp elbows and - as Jessica Pressler wrote in her 2011 New York profile of him - a “high EQ” to get to his position.
The global financial system as it is today was shaped by bankers like Blankfein, who steered Goldman through the Great Recession, accepting more than $69 billion in Federal Reserve loans to stay afloat. In more recent years, Goldman and rival JPMorgan Chase have competed for investment-banking deals there, even as Moscow never ascended to the status of a global financial center on the level of New York, London, or Hong Kong. Years later, as Treasury secretary, Rubin would help engineer a disastrous $22.5 billion loan to Russia from the International Monetary Fund that preceded a collapse in the value of the ruble. Over the next few years, the bank pulled out of the country, came rushing back in, and would help finance the Russian government in deals that turned sour soon after they closed. In 1992, Goldman - then under the direction of its co-chair Robert Rubin - pushed economic shock therapy to Boris Yeltsin’s new government. No bank was as influential in the region as Goldman, however. Goldman Sachs has a long, wobbly history in post-Soviet Russia as one of the many western banks that rushed into the country seeking to cash in on a potential gold rush of oil and debt sales after the Berlin Wall fell, as the New York Times reported back then. “You don’t want to overuse it for policy, but when the policy is so palpable and so moral that everybody in the world joins in save for the miscreants, I don’t think this will create any problem.”
“Everybody, even Russia and China, holds much of their assets in U.S.-dollar assets, which means U.S.
economy that even adversarial countries have few choices but to do business with us. It’s powerful evidence, Blankfein said, that the global financial system as it’s built relies so much on the U.S.
#LLYOD BANKS WARRIOR FREE#
On Saturday, it became clear that sanctions had escalated beyond the usual pinpricks on banks and oligarchs when the U.S., Canada, and Europe moved against the Russian central bank, essentially freezing the country’s assets and sending the ruble into free fall. Since Russian forces invaded last week, the G7 and NATO countries have been pulled in two directions: staying out of the conflict before it explodes into a Third World War or exerting whatever influence they have - short of actual combat - to keep Russia from toppling the global balance of power. Or did he? Vladimir Putin’s aggression is happening within the boundaries of Ukraine, yet it’s anything but a local skirmish over land. “You have to remember what life’s about,” he philosophized. Instead, he practically offered me the Golden Rule.
#LLYOD BANKS WARRIOR SERIES#
He was the guy whose bank made a killing off subprime mortgages and who was hauled in front of Congress to be the face of the most bare-knuckle aspects of Wall Street capitalism. I’d hoped to get some rare insight Blankfein might have on the ways the global financial system is being wielded to bring Russia’s economy to heel in a series of measures, with few precedents in history, that are being deployed at the start of what could ultimately become a 21st-century Cold War. For about a dozen years, Blankfein, 67, was atop one of the world’s most powerful investment banks in a position that turned him into both a power broker with few equals and a villainous caricature to the public, who only glancingly knew how Wall Street operated. “I know this will sound very unbankerlike,” he said, “but I think it crossed everyone’s moral threshold.” Moral threshold. Before Lloyd Blankfein left his condo at the luxe Faena House in South Beach on Monday afternoon, the billionaire former CEO of Goldman Sachs and I were talking about the global response to Russia’s war in Ukraine.
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