The finance world’s most ruthlessly efficient profitmaker has struggled in an era of tighter regulation. Now its supremacy is being challenged by both big banking peers and nimble fintech startups. Here’s how CEO Lloyd Blankfein plans to take Goldman back to the top.












LLOYD BLANKFEIN HAS always been a big worrier. At Harvard, the future CEO of Goldman Sachs worried that he wouldn’t be able to match wits with the prep-school students who seemed light-years more savvy than a little kid from an outer borough of New York City. “I was as provincial as you could be,” he once told me, “albeit from Brooklyn, the province of Brooklyn.” He worried at Harvard Law School. He worried at Donovan Leisure, the law firm where he worked as a tax lawyer. And he worried at J. Aron & Company, the commodities dealer Goldman Sachs had bought in 1981, the year before he joined it to trade gold—a task for which he had very few qualifications.

Blankfein, 62, has been the chairman and chief executive of Goldman since June 2006, when Hank Paulson left to become Treasury secretary, and he’s still worrying. He is hopeful that tax and regulatory reform—if it can be achieved amid the immense turmoil in Washington—will help propel Goldman back to its customary place as Wall Street’s most ruthlessly efficient profitmaker. But as usual he doesn’t know for sure what will happen, and so he worries. “Gee, I hope I don’t look back five years from now and say, ‘The last 10 years were the Golden Age,’” he says. “That would be bad. But who knows? When they had the 40-day flood, on the third day, they said, ‘Boy, that’s a lot of rain! It can’t last much longer.’ So who knows?”

It has certainly been a tumultuous decade or so, both for Goldman and for Blankfein himself. There was the financial crisis of 2008, of course, and the regulatory reckoning that came after—including the Dodd-Frank reform bill and the Volcker Rule, which greatly inhibited the highly profitable proprietary trading that Goldman had always seemed to do better than anyone else. The investment bank was memorably derided by Rolling Stone as a “great vampire squid wrapped around the face of humanity.” And Blankfein himself was relentlessly pilloried for a quip that Goldman and its peers were doing “God’s work.” More recently, Blankfein has faced a serious health scare: He was diagnosed with lymphoma in 2015 and spent months undergoing successful treatment. His doctors say the disease is in remission.

The professional and personal crises may have receded. But Blankfein now has a whole new set of reasons for anxiety.

To begin

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