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00:00These returns on equity they're already blowing past the targetsyou set on your Investor Day early last year and I'm wondering if this means you can set the bar higher in terms of whatinvestors can expect for targets moving forward or a sense of what a more regular return on equity environment looks like foryou. Well we've been we've been very clear when we set our target at Investor Day a year and a half ago that our targetswere and are we better than 13 percent. But we said that's not what we aspire to. And we thought that we could make changes inthe medium term. Eye to eye to deliver mid teens returns. We've highlighted that. We think that that's attainable in some of thediscussions we've had publicly and that we give the market more of an update. You know in the first quarter or in the early partof the second quarter as to how to think about our return trajectory going forward. But we feel good about the progresswe're making against that plan and continue to think there's a lot of upside opportunities. On the call with and also earlieryou also mentioned a series of headwinds. When you look at the markets that are ahead of us for the nextcouple of months what concerns you most about what you're seeing by highlighted in the earnings call that there are a handful ofthings going on that certainly lead to uncertainty. We are making progress with the vaccine. And you know I didstate on the earnings call that I feel like the virus is the worst of the virus's impact on the economy is most likely behindus. But we obviously have inflationary pressures particularly around wages. We have an active debate around infrastructurespending and other fiscal spending in Washington and potential tax increases. We've got a complex dynamic between the US andChina. There's still some uncertainty around around the Delta area.So all of that leads to potential headwinds. It doesn't mean that we won't see headwinds.I think we're starting to see a more sustained economic recovery. I think those are a handful of things that have to bewatched closely as we move forward as far as inflation goes. I know John Walton had spoken about it earlier this week but doyou think that investors are undercounting how much of an issue this is going to be. And will it force the Fed to hike a littlesooner than people expect. Well I think there's no question that inflation is a topic thatis front and center with every investor that I talked to and certainly with every CEO that's running a business of you knowof any size or any scope there is real wage inflation across all aspects of the economy right now. And there's certainly becausethe supply chain constraint inflation and other inputs to a whole variety of products and services. And so I think this issomething to watch very closely. It's not baked in the cake as to how this will play out and whether or not it will be asignificant issue as we go forward. But there is definitely inflation. We haven't seen it in a while. And the question iswhat choices do we make from here. How will those choices impact how inflation progresses from here. Those are things that nobodyhas the answers to. But I think you have to be watched very carefully. You mentioned wage inflation. I know you talked aboutit on a call a little earlier too. But how long do you think across the industry this upward pressure on wage inflation canpersist. And what can your own bankers expect. Well there's there's there is there's definitely wage inflationin all aspects of the economy. I think everybody that's running a business in some way shape or form has to adapt adjust tothat. As I said clearly on the call we run a paper performance culture and we're very attuned to what we need to do to keep thebest people serving our clients. Goldman Sachs and I'm sure that was put on that appropriately. David either mentioning it onmorning with three billion dollars in equity trading revenue that brings you past every single one of your peers. Do youthink that you can persist that do you think that you will continue to be the number one equity shop on Wall Street. Wehave. We have a leading equity franchise and we're continuing to invest in digital platforms and other capabilities that can helpus better serve our clients. You know I'm not going to speculate on a quarter to quarterbasis about exactly where we'll be positioned but I'm very confident that we have one of the leading equity franchisesappreciate of our clients and will continue to serve them well as we will forward. And when you look for your hiringopportunities moving forward which areas of the business do you think that you can continue to grow or are there cuts that youare both willing to make at this point at the end of the year. We've highlighted very clearly in our plan as I know you knowSonali that there are a handful of areas that we're investing and where we see there's an opportunity to really grow the firmand add more durable more durable and recurring fee based revenues to the firm's business mix. Those are probably mostmost prominently been the build out of our transaction banking platform asset management broadly with a particular focus on ouralternatives platform. It's been wealth management broadly and also our digital consumer bank. And so we continue to invest inthose businesses broadly speaking with respect to talent. We're always looking for extraordinary talent across the business.We've made hires in investment banking in markets and asset management and consumer and other parts of the firm such as riskand and compliance and legal over the course of the year. And we continue to look for great talent. There's always room for greattalent at Goldman Sachs. And we'll continue to find people that we think could strengthen our franchise. We've made somephenomenal hiring hires in the engineering space and continue to attract many world class engineers to our platform. Given someof what we're working on. So talent acquisition will always be a focus for us and something just this quarter what we do. Soreturn to office. Are you finding that more and more people are coming back now that the year is progressing. You had mentionedthat remote work to you as an operation. And do you feel that way.Well we're definitely. I've actually said that I've never said that remote work was an aberration. I was asked a question abouttraders 98 percent of our traders working from home. And I said 98 percent of our traders working from home was an aberration. Ido think generally and I've been very clear on this for Goldman Sachs to effectively serve our clients and also to hire andretain and protect all the young people that want to come work at the firm we generally bring people together. We have a verycollaborative apprenticeship culture. And I've been encouraged by the fact that more and more people across our offices aroundthe world have been returning to office. We have always been extremely flexible with our high high performing employees andgiving them lots of flexibility to manage the life and travel and work remotely which is a core part of our business thatcontinues. But fundamentally we bring people together to collaborate innovate and in particular to mentor andapprenticeship offer apprenticeship to our young employees. And I think a lot of positive journey there. That's right. Forgolfers that. And so we're going to continue to execute on that. David you mentioned the expansion of your operating leveragehere. You're making much more money than you are spending. Do you think that this is going to give you more room to do evenbigger acquisitions ahead. Were we. We laid out a plan at arms yesterday finale to continueto bolster our core business is to grow in four key areas and run the firm more efficiently. And we're executing on that.You know it sounds like you listened to the earnings call. And I said on the earnings call earlier and in particular with withasset management wealth management consumer. Our digital consumer banking platform. If there are inorganic opportunitiesto accelerate our growth and our objectives and our strategic positioning in those businesses we'll certainly consider them.But should they be considered more tuck on. Or can we can they can we see something more transformative in the next year or so.We're always looking at things that we can do that can extend our competitive position in those areas. If we find somethingthat's attractive that can accelerate our position we will consider it. But it has to offer a creative return.And the outlook for the franchise and for our audience. Also can you explain your chance to expand abroad. David I know thatyou've been expanding and hiring in different areas outside of the United States. What are you most looking forward to.But we want a global firm finale. And so at the moment about 45 percent of our business is around the world outside of theUnited States. You know I highlighted on the call that I was excited about the fact that an end is giving us more strength inour asset management business in Europe. I mentioned the fact that we're excited about our wealth management joint venturewith ICBC in China. We operate a global firm. We operate in 45 countries around the world. We have a significant portion of ourrevenues outside the United States and we continue to think about operating as a global firm. We think a position goes backto serve our clients.

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Goldman CEO on Wage Inflation, Earnings, Returning to the Office

Goldman Sachs Group Inc. posted a surprise revenue jump in its trading business, rounding out a stellar quarter for Wall Street’s biggest banks. In an interview after the firm released their third-quarter earnings, CEO David Solomon spoke with Bloomberg's Sonali Basak. (Source: Bloomberg)

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