Britannica Money (2024)

Lloyd Blankfein (born September 20, 1954, Bronx, New York, U.S.) is an American business executive who served as chairman and chief executive officer (CEO) of the investment banking and securities company Goldman Sachs Group, Inc., in the early 21st century. His tenure was marked by criticism owing to his controversial comments and high executive salary during a time of global economic crisis.

Blankfein was raised in the Brooklyn borough of New York City. His father was employed as a U.S. Postal Service clerk, and his mother worked as a receptionist. In 1971 he graduated from Thomas Jefferson High School as the valedictorian of his class, and he subsequently attended Harvard University on an academic scholarship, earning a bachelor’s degree in 1975 followed by a degree from Harvard Law School in 1978. He was later employed as a corporate tax lawyer for the law firm Donovan, Leisure, Newton & Irvine before joining J. Aron & Co., a commodities-trading firm, as a precious-metals trader in 1981. In the same year, the company was purchased by Goldman Sachs, and it thereafter operated as a subsidiary.

Blankfein became a partner of Goldman Sachs in 1988, and in 1994 he was named cohead of the J. Aron subsidiary; by 2002 Blankfein was head of all sales and trading. In 2004 he was named president and chief operating officer of Goldman Sachs, and two years later he succeeded Henry Paulson as chairman and CEO after Paulson was nominated to serve as the secretary of the U.S. Department of the Treasury under Pres. George W. Bush.

Blankfein quickly became one of the highest-earning chief executives on Wall Street, and in 2008—owing to a decrease in market liquidity resulting from the global economic crisis—he transformed Goldman Sachs from an investment bank into a bank holding company, thereby putting it under the respected regulatory oversight of the Federal Reserve and giving it access to Fed credit. Blankfein was named 2009 Person of the Year by the British business newspaper Financial Times, but owing to his controversial comments—such as that, as a banker, he was “doing God’s work”—and to his high compensation amid the economic downturn, he was also named Most Outrageous CEO of 2009 by the American business magazine Forbes. In 2010 he testified regarding the company’s business practices before the U.S. Financial Crisis Inquiry Commission—a group that had been appointed by Congress to assess the causes of the global financial crisis. In April the U.S. Securities and Exchange Commission sued Goldman Sachs for securities fraud for having allegedly misled investors when it marketed a subprime-mortgage-backed investment product known as Abacus. By July the firm had settled with the SEC by agreeing to pay a record $550 million in penalties and to reform its business practices.

During Blankfein’s later tenure, Goldman Sachs continued to have success with its investment-banking unit, though its trading division struggled. Some criticized him for failing to diversify the company. In 2018 Blankfein stepped down as both chairman and CEO of Goldman Sachs.