Goldman preparing for massive deterioration in Europe
01 June 2012
Goldman Sachs is taking steps to prepare for massive deterioration in Europe, including a possible dissolution of the euro.
According to Gary D Cohn, the bank's president, who spoke to a group of investors at a conference sponsored by investment management firm Sanford C Bernstein, Goldman, like other banks, had reduced its exposure to Europe and was currently examining all euro-denominated contracts to assess what the ability to pay in a different currency would be in the even of the scrapping of the euro.
''We have gone through contract by contract and position by position to understand what any permutation could be,'' he told the audience, in response to a question as to how Goldman might manage through a breakup of the European Monetary Union.
Cohn's remarks come as Europe experiences escalation of its troubles, and heightened speculation of a Greek exit.
He fielded questions on a range of topics, that included a sell off of Goldman in parts as also the possibility of a rating downgrade by Moody's Investors Service of a several big financial companies, including Goldman.
Bernstein analyst Brad Hintz said Goldman was a ''relative winner'' as in the event of possible Moody's downgrade its ratings were not expected to fall as much as many of its rivals'.