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FIRST ON CNBC: CNBC TRANSCRIPT: GOLDMAN SACHS CHAIRMAN & CEO LLOYD BLANKFEIN SPEAKS WITH GARY KAMINSKY TODAY ON CNBC

Jennifer Dauble
Wednesday, 25 Apr 2012 | 1:14 PM ET

When: Today, Wednesday, April 25th at 11AM ET

Where: CNBC’s “Squawk on the Street

Following is the unofficial transcript of a FIRST ON CNBC interview with Goldman Sachs Chairman & CEO Lloyd Blankfein, today, Wednesday, April 25th, on CNBC’s “Squawk on the Street” (M-F, 9AM – 12PM ET). This is Blankfein’s first interview since 2010.

All references must be sourced to CNBC.

KAMINSKY: THANK YOU, AGAIN, CARL. WE ARE HERE AT THE GLOBAL HEADQUARTERS OF GOLDMAN SACHS CORNER OFFICE AND AS IS TRADITION WHEN YOU ARE A GUEST IN SOMEBODY'S HOUSE YOU FOLLOW PROTOCOL. I'VE TAKEN MY JACKET OFF AS I'M JOINED BY CHAIRMAN AND CEO LLOYD BLANKFEIN. NO JACKETS HERE TODAY, LLOYD. CARL MENTIONED THIS IS YOUR FIRST LIVE INTERVIEW IN ALMOST TWO YEARS. WHY TODAY? WHY DID YOU WANT TO HAVE THIS DISCUSSION TODAY?

BLANKFEIN: WELL, GARY, WE'RE HAVING OUR BRICS CONFERENCE TODAY AND HERE YOU ARE COME TO OUR HOUSE, HOW COULD I SAY NO?

KAMINSKY: IS IT A SENSE GIVEN A LOT OF WHAT'S HAPPENED OVER THE LAST COUPLE OF YEARS IT'S IMPORTANT FOR YOU TO MAYBE TAKE A DIFFERENT APPROACH DEALING WITH THE PUBLIC AND MAYBE THAT HAS A LITTLE BIT OF WHY WE WANT TO DO THIS AS WELL?

BLANKFEIN: I THINK SO. NOT TODAY SPECIFICALLY BUT OBVIOUSLY IT OCCURRED TO US WE HAVEN'T GOTTEN EVERYTHING RIGHT WITH RESPECT TO HOW WE'VE DEALT WITH THE PUBLIC. AND DON'TFORGET, WE ARE AN INSTITUTIONAL WHOLESALE FIRM. WE HAVE NO REAL CONSUMER BUSINESSES SO WE HADN'T REALLY HAD THOSE MUSCLES AND NOT SURPRISINGLY DIDN'T EXERCISE THEM AND WENT THROUGH A SPATE OUT FRONT AND AVAILABLE ALL THE TIME AND WENT THROUGH A PLACE WHERE WEREN'T. OBVIOUSLY THE ANSWER WILL BE SOMETHING IN THE MIDDLE. BUT, YOU KNOW, I'M GLAD TO BE WITH YOU TODAY AND HOPE WE HAVE A GOOD CONVERSATION

KAMINSKY: LET'S TALK ABOUT THE MORNING OF MARCH 14th. IT WAS A WEDNESDAY MORNING. YOU PROBABLY GOT UP EARLY. I GOT UP EARLY. THERE WAS AN OP-ED A FORMER EMPLOYEE HERE VICE PRESIDENT GREG SMITH. TELL ME WHAT THAT DAY WAS LIKE WHEN YOU READ THAT OP-ED.

BLANKFEIN: WELL, I DIDN'T WAKE UP EARLY. ACTUALLY REMEMBER IT BECAUSE I TRAVELED THE NIGHT BEFORE FROM OVERSEAS. I ACTUALLY GOT A CALL IN THE MORNING OF SOMEBODY SAID, TRYING TO DISCUSS IT AND I HAD IDEA WHAT THEY WERE TALKING ABOUT. I WENT TO MY COMPUTER AND SAW THE ARTICLE AND SAID, WE'VE GOTTEN USED TO -- WE'VE GOTTEN USED TO -- EXCUSE THE OXYMORON. WE'VE GOTTEN USED TO SURPRISES SO WE KNEW WE'D HAVE TO GRAPPLE WITH IT BUT WE READ IT CLOSELY. OF COURSE, OUR FIRST REACTION IS TO TAKE IT VERY SERIOUSLY AND SAY WHAT IS REALLY GOING ON HERE AND TO TRY TO GET AT THE WORK BUT, OF COURSE, AS THE DAY WORE ON, WE JUST GOT A TREMENDOUS RESPONSE FROM EVERYONE. OBVIOUSLY THE PRESS RESPONSE WAS ONE WAY BUT I, OF COURSE, HAVE TO DEAL WITH CLIENTS AND WITH THE PEOPLE AT WORK AND FROM THEM THE RESPONSE WAS OVERWHELMINGLY SUPPORTIVE AND POSITIVE.

KAMINSKY: YOU DECIDED TO ADDRESS I THINK IT WAS THROUGH AN E-MAIL THE ENTIRE FORCE AND SAY IS THIS YOUR EXPERIENCE? PLEASE LET ME KNOW. YOU WANTED FEEDBACK. TELL ME WHAT THE FEEDBACK WAS. DID YOU HEAR FROM OTHERS IN THE COMPANY THAT THEY FELT A SIMILAR CULTURE WHICH WAS ANTI-CLIENT EXISTED?

BLANKFEIN: NO, NOT AT ALL. LOOK AT OUR FRANCHISE. LOOK AT THE SIZE OF OUR CLIENT BUSINESS. WE HAVE ONE OF THE BEST IF NOT THE BEST CLIENT FRANCHISE IN INVESTMENT BANKING -- YOU COULD NOT HAVE THAT IF YOU WERE ANTI-CLIENT. AS FAR AS THE PEOPLE IN THE FIRM THINK, WE, YOU KNOW, WE RECRUIT HEAVILY. SOMETHING -- WHEN YOU GIVE A JOB OFFER TO SOMEBODY ON WHEN THEY HAVE COMPETING JOB OFFERS SOMETHING CLOSE TO 90% OF THE PEOPLE ACCEPT US. WE COULDN'T HAVE THOSE KINDS OF NUMBERS IF WE WERE LIKE THAT. THE REACTION INTERNALLY WAS ONE OF SHOCK. THERE WAS ONE PERSON WHO OBVIOUSLY WAS VERY EARNEST ABOUT WHAT HE HAD WRITTEN AND AGAIN IT WASN'T SPECIFIC CHARGES AS MUCH AS A DIMINUTION OF THE CULTURE. BUT WE HAD 30,000 PEOPLE THAT FELT THE OPPOSITE AND CLIENTS WERE UNBELIEVABLY SUPPORTIVE. DIDN'T UNDO THE DAMAGE AND THE SHOCK TO THE WIDER PUBLIC, BUT WE CERTAINLY WERE BUOYED FROM THE RESPONSE WE GOT FROM OUR CLIENTS AND INVESTORS AND OUR PEOPLE AT GOLDMAN SACHS.

KAMINSKY: JUST TO PUT THE ISSUE TO BED. YOU DID THIS INVESTIGATION YOU LOOKED THROUGH E-MAILS AND THIS IDEA OF MUPPETS AND CALLING CLIENTS MUPPETS. CAN WE CATAGORICALLY SAY THAT YOU'VE DONE THE THOROUGH INVESTIGATION AND IT WAS -- THIS WAS TYPICALLY A ONE-OFF?

BLANKFEIN: LOOK, THE ANSWER IS, YES, WE COULD FIND NO SUBSTANTIATION. BUT LET ME JUST TELL YOU WHAT WE HAVE -- WHAT WE HAVE IS -- WE ASK EVERYBODY IN THE FIRM TO DO A 360 REVIEW OF EVERYBODY ELSE. WE HAVE THE REVIEWS OF THIS FELLOW. WE HAVE THE REVIEWS BY THIS FELLOW OF EVERYBODY AROUND HIM. WE CAN GO THROUGH E-MAILS AND WE HAVE REPORTS WE HAVE WRITTEN DOCUMENTATIONS. WE ARE OBSESSIVE ABOUT EVERYBODY SOLICITING EVERYBODY'S VIEWS AND WENT THROUGH THAT AND COULDN'T FIND SUBSTANTIATION OF THIS BUT LET ME TELL YOU -- IF YOU RATCHET UP THE PRESSURE TO HAVE A GOOD CULTURE AT GOLDMAN SACHS AND AS A RESULT GET CLOSER TO YOUR CLIENTS NO DOWNSIDE TO THAT. SO WE TAKE IT VERY VERY SERIOUSLY

KAMINSKY: DID "THE NEW YORK TIMES" ASK YOU TO REVIEW ANY OF THOSE 360s BEFORE PUBLISHING THAT OP-ED?

BLANKFEIN: WE HAD NO COMMUNICATION WITHTHE PAPER BEFORE THAT WAS PUBLISHED.

KAMINSKY: IF THEY WANT TO SEE THOSE 360 REVIEWS, WOULD THEY BE ABLE TO HAVE ACCESS TO THOSE.

BLANKFEIN: WE HAVE CERTAIN KINDS -- ASKED PEOPLE TO DO IT ON A BASIS THAT PROBABLY DOESN'T ALLOW US TO SHOW THAT EXTERNALLY.

KAMINSKY: LET'S TALK ABOUT THE BOARD OF DIRECTORS. OBVIOUSLY EVERY COMPANY, EVERY PUBLIC COMPANY HAS A BOARD OF DIRECTORS.

BLANKFEIN: RIGHT.

KAMINSKY: THIS IS A COMPANY THAT THE BOARD HAS GOTTEN SOME MORE -- SHALL WE SAY ATTENTION THAN MOST IN THE LAST SEVERAL YEARS. GIVE ME -- HOW DO YOU SEE AS CHAIRMAN OF THE BOARD AS WELL AS BEING CEO, TELL ME WHAT THE ROLE OF THE BOARD OF DIRECTORS AT GOLDMAN SACHS SHOULD BE AND IS.

BLANKFEIN: THE DIRECTORS REPRESENT THE SHAREHOLDERS. THEY OVERSEE MANAGEMENT, MANAGEMENT, OF COURSE, MAKES DECISIONS ON HOW TO RUN THE BUSINESS AND A BOARD OF DIRECTORS OVERSEES THAT. WE OPERATE THROUGH COMMITTEES AND THE COMMITTEES BY THEIR NAMES DECLARE WHAT THE RESPONSIBILITIES ARE. WE HAVE GOVERNANCE IN NOMINATING AND COMPENSATION. AND AUDIT COMMITTEE AND RISK AND I'LL TELL YOU WITH AS GOOD A BOARD WE HAVE, THEY ARE VERY, VERY FOCUSED AND ASK A LOT OF QUESTIONS AND ARE QUITE KNOWLEDGEABLE. WE HAVE BOARD MEMBERS WOULD HAVE BEEN ON OUR BOARD SINCE WE BECAME PUBLIC AND NEW MEMBERS WHO BRING A FRESH PERSPECTIVE, PEOPLE IN FINANCE AND INDUSTRIALALISTS SO IT'S A VARIED GROUP BUT I'LL SAY ALSO THEIR EXPERIENCE HAS BEEN VARIED. THINK OF WHAT THIS COMPANY HAS EVOLVED INTO SINCE WE BECAME PUBLIC NOT THAT LONG AGO, A DOZEN YEARS AGO, A SMALL COMPANY, BECAME A MUCH BIGGER COMPANY. WE WERE PRIVATE PARTNERSHIP WE BECAME PUBLIC. WENT THROUGH -- THINK OF THE RISK MANAGEMENT THAT WENT INTO OUR EXPERIENCES GOING INTO THE FINANCIAL CRISIS WHERE WE HAD HAD MUCH BETTER HEDGES AND HAD MANAGED OUR RISKS TO A MUCH GREATER EXTENT. THINK OF THE AFTERMATH OF THE RISK OF THE DOWNTURN WHERE WE HAD, FRANKLY, MANAGE THE OUTCOME OF THE CRISIS.

KAMINSKY: JUST IN TERMS OF THE BOARD. YOU OBVIOUSLY -- BEING A CHAIRMAN AND BEING CEO AND HAVING THAT ROLE AS A COMBINED ROLE OR A SEPARATE ROLE, DO YOU STILL THINK THAT IS SENSE FOR THIS INSTITUTION TO HAVE A CHAIRMAN AND CEO AS A COMBINED ROLE.

BLANKFEIN: I THINK IT ABSOLUTELY MAKES SENSE. WHAT YOU DON'T HAVE IN CRITICAL MOMENTS, YOU DON'T HAVE DIVIDED LEADERSHIP OR DIVIDED AUTHORITY OR MORE THAN ONE FOCUS OF THE FIRM. BUT THE WAY GOVERNANCE HAS EVOLVED THROUGH, YOU KNOW, SARBANES-OXLEY AND WITH THE ROLES OF PRESIDING DIRECTORS AND LEAD DIRECTORS DEPENDING ON WHAT YOU CALL THEM IN AN ORGANIZATION YOU GET QUITE A LOCUST OF AUTHORITY IN THE LEAD DIRECTOR OR PRESIDING DIRECTOR ON A BOARD AND BECAUSE OF REGULATION THERE ARE TIMES IN THE PROCESSES WHERE I ACTUALLY LEAVE THE ROOM, THE AGENDA IS SET BY OTHERS BESIDES MYSELF. IT'S A MISNOMER -- THE SITUATION ON BOARDS IS HALFWAY BETWEEN A SEPARATE ROLE AND THE OLD -- YOUR OLD CONCEPT OF WHAT A SINGLE UNITARY CHAIRMAN AND CEO WAS AND I THINK IT'S IN THE RIGHT PLACE. EXTERNALLY THERE IS ONE VOICE FOR THE FIRM WHICH IS A GOOD THING, NOT A BAD THING BUT INTERNALLY THERE IS A LOT OF RESPONSIBILITY AND ACCOUNTABILITY BY INDEPENDENT DIRECTORS.

KAMINSKY: DID THE BOARD AT ANY POINT IN THE LAST FOUR YEARS EITHER ENCOURAGE OR SUGGEST THAT YOU MAY WANT TO STEP DOWN AND POSSIBLY CREATE A TRANSITION PLAN WITHIN THE COMPANY?

BLANKFEIN: NO, BUT, OF COURSE, ONE OF THE MOST IMPORTANT RESPONSIBILITIES THAT I HAVE AND THE BOARD WOULD HAVE IS MAKE SURE THERE'S ALWAYS A SUCCESSION FROM THE MOMENT YOU GET IN THERE IS A SUCCESSION PLAN.

KAMINSKY: I AM GLAD YOU BRIN THAT UP IS THERE A PLAN IN PLACE RIGHT NOW.

BLANKFEIN: OF COURSE, THERE IS A LOT OF CONTINGENCIES BUT ALWAYS, ALWAYS, ALWAYS. IN OTHER WORDS, THAT'S A RESPONSIBILITY YOU HAVE WHEN YOU'RE SITTING IN ANY – PERIOD OF RESPONSIBILITY THERE IS THE WHAT IS THE LONG-TERM PLAN AND WHAT IS THE -- IF YOU GET HIT BY A BUS PLAN.

KAMINSKY: ABSOLUTELY. WELL, IF YOU GOT HIT BY A BUS PLAN AND GOD FORBID THAT HAPPEN, DOES THE PERSON WHO WILL BE RUNNING GOLDMAN SACHS, DO THEY KNOW THEY'RE THAT PERSON.

BLANKFEIN: NOT SPECIFICALLY AND, YOU KNOW, WE HAVE -- GOLDMAN SACHS HAS ALWAYS BEEN BLESSED THROUGH THE YEARS WITH A LOT OF TERRIFIC PEOPLE. IF YOU LOOK, FRANKLY, IF YOU LOOK AT THE MANAGEMENT OF A LOT OF OTHER CORPORATIONS, PHILANTHROPY, HEDGE FUNDS, PRIVATE EQUITY AND A LOT OF COMPETITORS THERE ARE EXECUTIVES THERE WHOSE -- WHO MADE THEIR CAREER IN A GREAT PART AT GOLDMAN SACHS. WE'VE ALWAYS ATTRACTED A LOT OF TALENT AND NURTURED A LOT OF TALENT.

KAMINSKY: SO THERE IS NO PLACE IN PLACE TO SAY GARY BECOMES CEO IN THE EVENT SOMETHING HAPPENS TO YOU, THE BOARD WILL MAKE A DETERMINATION.

BLANKFEIN: WE HAVE A LOT OF TERRIFIC SENIOR EXECUTIVES INCLUDING BUT NOT LIMITED TO GARY.

KAMINSLY: WHAT'S YOUR FUTURE? HOW LONG WILL YOU STAY AROUND HERE?

BLANKFEIN: I HAVE NO PLANS TO LEAVE. I READ THE SAME PAPERS YOU DO. I JUST DON'T KNOW -- YOU MAY THINK THEY GET IT FROM ME. I COULD TELL YOU I HAVE NO IDEA WHERE THEY GET IT FROM. SO MY PLAN IS -- THIS IS A TERRIFIC JOB. IT'S INTERESTING. YOU GET TO BE IN A LOT OF DIFFERENT INDUSTRIES, I GET TREMENDOUS SUPPORT FROM WHO -- IF YOU'RE -- EXCUSE MY PRIDE I GET TO HANG AROUND A LOT OF THE SMARTEST PEOPLE AND DEAL WITH GREAT CLIENTS, AROUND SIGNIFICANT PROBLEMS WITH A LOT OF CONSEQUENCE FOR THE WORLD. IT'S TERRIFIC AND I'LL TELL YOU, THE PARTS OF IT THAT LOOK LIKE THEY WOULD BE HARD AND UN UNPLEASANT I ASSURE YOU ARE HARD AND UNPLEASANT AND IN THOSE MOMENTS IT'S NOT THAT YOU LOVE IT BUT YOU HAVE A SENSE OF RESPONSIBILITY MAKES YOU CONDUCT YOURSELF ANYWAY

KAMINSKY: LET'S TALK ABOUT THE BUSINESS. WE HAD JIM O'NEAL ON EARLIER, TALKING ABOUT GROWTH COUNTRY, GROWTH MARKETS. IS INVESTMENT BANKING STILL A GROWTH BUSINESS IN THE WORLD?

BLANKFEIN: WELL, IN THE WORLD, ABSOLUTELY IT'S A GROWTH -- THERE ARE BUSINESSES AND MARKETS THAT DIDN'T EXIST – MY PREDECESSORS DIDN'T GO TO CHINA THREE OR FOUR TIMES A YEAR LIKE I DO OR INDIA THREE TIMES A YEAR LIKE I DO, JUST WASN'T AN OPPORTUNITY. IF YOU THINK OF WHAT INVESTMENT BANK DOES, WHICH IS ADVISE PEOPLE ON THEIR GROWTH PLANS, FINANCE THOSE PLANS, MANAGE ASSETS FOR THEM, THESE WERE NOT PLACES WHERE WEALTH WAS BEING CREATED OR COMPANIES WERE BEING FORMED SO NOW THE WORLD HAS GOTTEN MUCH BIGGER FOR INVESTMENT BANKING.

KAMINSKY: IS THIS COMPANY RIGHT SIZE TODAY FROM BOTH A HUMAN CAPITAL STANDPOINT AS WELL AS A CAPITAL STANDPOINT TO BASICALLY CREATE GOOD SUSTAINABLE RETURNS ON CAPITAL FOR SHAREHOLDERS WITH THE SIZE OF THE MARKET AROUND THE WORLD AS WELL AS IN THE UNITED STATES TODAY?

BLANKFEIN: I WOULD SAY IF YOU LOOK AT IT IN THE REAL TERM, THERE'S OBVIOUSLY CYCLICAL MOMENTS WHEN YOU SAY TODAY IF YOU MEAN TODAY WEDNESDAY AS OPPOSED --

KAMINSKY: RIGHT, LET'S SAY THE NEXT THREE TO FIVE YEARS.

BLANKFEIN: I DIDN'T MEAN SO MUCH THE TIME. LOOK, WE'RE IN A TROUGH OF ACTIVITY, CHINA HAS BEEN IN A BIT OF A SLOWDOWN, KIND OF A MANAGED SLOWDOWN MODE, OBVIOUSLY EUROPE HAS IS A LITTLE BIT SLOW -- AND THE U.S. IS SLOWER THEN PEOPLE THOUGHT WE WOULD HAVE BEEN AT THIS POINT IS OBVIOUSLY IN A GROWTH MODE BUT AT A LOWER TRAJECTORY AND SO ALL OF OUR BUSINESSES THAT I DESCRIBED TO YOU CORRELATE WITH GROWTH AND THERE IS KIND OF A CYCLICAL I WOULD SAY IN TERMS OF GROWTH MODE THE COUNTRY MAY BE IN LIKE A THIRD OR FOURTH QUARTILE OPPORTUNITY SET SO TODAY THERE'S VERY, VERY SHORT-TERM QUESTIONS YOU CAN ASK AS, YOU KNOW, ARE THESE FIRMS ABSOLUTELY RIGHT SIZE? WE BELIEVE WE ARE. THAT'S OUR BIG RESPONSIBILITY AND THINK WE'RE IN THE RIGHT PLACE. FOR THE LONGER TERM, WE DEFINITELY HAVE TO EXPAND OUR FOOTPRINT OVERSEAS.

KAMINKY: OKAY.

BLANKFEIN: TO THE GROWTH MARKETS.

KAMINSKY: WHEN YOU THINK ABOUT GROWING THE BUSINESS, YOU ALWAYS HAVE TO THINK ABOUT COMPETITION. WOULD YOU SAY THAT OTHER INVESTMENT BANKS BE IT A MORGAN STANLEY, A DEUTSCHE BANK AROUND THE WORLD ARE -- J.P. MORGAN ARE MORE OF YOUR COMPETITION IN TERMS OF EXECUTING ON GROWTH OR IS IT GOVERNMENT REGULATION WHEN YOU THINK ABOUT HOW WE ARE GOING TO DEVELOP THESE BUSINESSES? WHICH IS MORE OF A COMPETITION IN TERMS OF YOU LAYING OUT THE PLAN?

BLANKFEIN: WELL, OUR COMPETITORS NAVIGATE IN THE SAME PLACES AND, YOU KNOW, LISTEN, COMPETITION IS A GOOD THING. WE TRY TO OUTCOMPETE OUR COMPETITORS BUT TIMES WHEN THEY DO SOMETHING BETTER THAN US WE FIGURE OUT HOW TO LEAPFROG OVER THEM. EVERY INDUSTRY IS LIKE THAT.

KAMINSKY: YOU’VE GOT THE GOVERNMENT RIGHT. YOU'VE GOT THIS HUGE, HUGE DEVELOPED REREGULATION OR NEW REGULATIONS YOU'VE GOT TO DEAL WITH. IS THAT THE BIGGEST THREAT TO THE GROWTH OF THIS BUSINESS.

BLANKFEIN: I THINK IT'S A CHALLENGE BUT IT'S A CHALLENGE FOR US AND IT'S A CHALLENGE FOR THE REGULATORS AND IT'S A CHALLENGE FOR THE SOCIETY. OUR INDUSTRY IS HUGELY IMPORTANT FOR THE WORLD. AGAIN, WE FINANCE GROWTH. WE MAKE DECISIONS ABOUT WHETHER TO SUPPORT THIS ACTIVITY OR NOT TO SUPPORT THAT -- IT'S A VERY KEY AND IMPORTANT FUNCTION OF THE ECONOMY, THE MARKETS AND SOCIETY AT LARGE AND WE'RE ALL TRYING TO GET IT RIGHT. AND SO I WOULD SAY IT'S A CHALLENGE. NOW, BECAUSE WE HAD SUCH A BIG SHOCK, SUCH A BIG TRAUMA, NOT SURPRISINGLY PEOPLE FEEL THE WAY ALONG, THE PENDULUM GOES A LITTLE TOO FAR AND HAS TO GO THE OTHER WAY WE DEFINITELY – THE MARKETS ARE ALWAYS EVOLVING AND REGULATION HAS TO EVOLVE WITH IT. WE EXPECT A KIND OF A LURCH NOW AND A VERY BIG FOCUS ON IT, AND I'D SAY WE'RE KIND OF PARTNERS -- LOOK, I DON'T LIKE EVERYTHING -- EVERYTHING THAT'S BEEN PROPOSED OR I DON’T LIKE EVERY REGULATION BUT THE IDEA WE HAVE TO HAVE SOME SORT OF REFORM IS OBVIOUSLY YOU COULDN'T DENY THAT.

KAMINSKY: REGULATION MAKES ME THINK ABOUT POLITICS.

BLANKFEIN: LET ME SAY OTHER ONE OTHER THING. AS THE MARKET GETS SAFER BECAUSE OF CERTAIN OF THESE ADJUSTMENTS, THERE WILL BE NO GREATER BENEFICIARY OF THAT THAN THE FIRMS THAT MANAGE THEMSELVES WELL. THE BIGGEST THREAT TO GOLDMAN SACHS EVER, THE EXISTENTIAL THREAT TO GOLDMAN SACHS WAS THE POOR PERFORMANCE AND THE BAD RISK MANAGEMENT PRACTICES OF SOME OF OUR COMPETITORS WITH WHOM WE HAD RELATIONSHIPS.

KAMINSKY: IN LINE WITH THAT ONE WOULD BE VERY SURPRISED IF SAY A YEAR FROM TODAY YOU SAID WE WEREN'T ABLE TO EXECUTE ON PLAN BECAUSE OF THE REGULATORY ENVIRONMENT BECAUSE IT SOUNDS AS IF YOU WERE FINDING WAYS TO ADAPT WITHIN THE REGULATORY ENVIRONMENT TO CREATE THE RETURNS THAT SHAREHOLDERS EXPECT.

BLANKFEIN: WE'RE ALSO HELPING REGULATORS -- WE ALSO GO DOWN AND ADVISE OUR REGULATORS ON WHAT WE WOULD LIKE TO SEE STRAIGHTENED UP AND TIGHTENED. NOW, SOMETIMES THEY GO TOO FAR AND WE ASK THEM, LOOK, WE'RE NOT ONLY ABLE TO TELL THEM WHAT WE THINK IS WRONG BUT IT'S OUR DUTY. ULTIMATELY SOCIETY MAKES THE DECISION BUT SOCIETY NEEDS THE INPUT OF EXPERTS LIKE OURSELVES SO I THINK IT'S OUR DUTY TO INFORM WHERE THEY THINK THEY'VE GONE TOO FAR OR NOT FAR ENOUGH AND WE WON'T LIKE EVERYTHING AND THE BALANCE WON'T BE STRUCK THE WAY WE LIKE IT BUT WE'RE ENGAGED IN THE PROCESS AND IT'S IMPORTANT FOR US AND EVERYBODY.

KAMINSKY: LLOYD, BEFORE WE GO ON TO POLITICS, THIS PRESIDENTIAL ELECTION LATER THIS YEAR, A LOT OF EMPLOYEES AT GOLDMAN HAVE GOTTEN BEHIND ROMNEY. IS THERE A VERY STRONG OPINION IN TERMS OF WHO THIS INSTITUTION WOULD LIKE TO SEE AS THE NEXT PRESIDENT OF THE UNITED STATES?

BLANKFEIN: THE INSTITUTION DOESN'T HAVE A VIEW AND DOESN'T PARTICIPATE IN THOSE. WE HAVE A NUMBER OF PEOPLE AND YOU'D FIND PEOPLE ON BOTH SIDES. I GET -- MY E-MAIL IS FILLED WITH INVITATIONS TO ATTEND FUND-RAISERS FOR PEOPLE OF EVERY PARTY AND EVERY POINT OF VIEW BECAUSE THAT'S -- REFLECTS THE DIVERSITY OF THE FIRM.

KAMINSKY: HAVE YOU DECIDED TO PERSONALLY BACK EITHER OF THE CANDIDATES?

BLANKFEIN: YOU KNOW, I'M KIND OF A ROCKEFELLER REPUBLICAN. A REGISTERED DEMOCRAT AND A ROCKEFELLER REPUBLICAN. I'M PROBABLY CONSERVATIVE ON FISCAL ISSUES AND MORE LIBERAL ON SOCIAL ISSUES AND WHERE THAT WILL GET ME, I'M NOT SURE.

KAMINKSY: WE HAVE TO RUN BUT HOPEFULLY WILL SEE YOU BEFORE ANOTHER TWO-YEAR PERIOD. THANKS FOR ALLOWING US IN HERE AND, CARL, HOPEFULLY WE GOT GOOD ANSWERS TO QUESTIONS OUT THERE AND CERTAINLY SOUNDS TO ME AS THOUGH THIS INSTITUTION IS TRYING TO FIGURE OUT HOW TO REALLY REWARD SHAREHOLDERS IN THE NEW REGULATORY ENVIRONMENT AND A GOOD THING, NOT JUST FOR GOLDMAN SACHS BUT FOR THE OVERALL EQUITY MARKETS.

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