Blankfein Says Risk Mistakes Shouldn’t Be Penalized ‘Too Much’

Lloyd C. Blankfein, chairman and chief executive officer of Goldman Sachs Group Inc. (GS), said mistakes in risk judgment shouldn’t be penalized “too much.”

“If you put too much penalty on risk judgment, what kind of world are you going to have?” Blankfein, 57, said at the Chicago Club, where he was participating in a discussion with Motorola Solutions Inc. Chairman and CEO Greg Brown. “If you’re getting pounded and being made to ask questions, what kind of economic system do we have?”

Goldman Sachs, the fifth-largest U.S. bank by assets, competes with JPMorgan Chase & Co. (JPM), the biggest, in investment banking, trading and asset management. Jamie Dimon, the chairman and CEO of JPMorgan, is scheduled to testify to a Senate committee today about how his bank lost money on derivatives trades. In a prepared statement released yesterday, Dimon in part blames risk-management failures for the loss.

“Risk management isn’t about getting risk right all the time,” Blankfein said. “It’s about trying to get risk right all the time.”

To contact the reporters on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net; Christine Harper in New York at charper@bloomberg.net

To contact the editors responsible for this story: Steve Stroth at sstroth@bloomberg.net; David Scheer at dscheer@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.