Goldman’s CEO says business leaders are more optimistic on economy

THE sentiment among chief executive officers has improved in recent months after predictions last year that the US economy was headed towards a possible recession, Goldman Sachs Group chief executive officer David Solomon said.

“The consensus has shifted to be a little bit more dovish in the CEO community that we can navigate through this with a softer economic landing,” Solomon, 61, said at a Credit Suisse Group conference on Tuesday (Feb 14). “The chance of a softer landing feels better than it did six to nine months ago.”

Goldman last month began implementing a plan to eliminate about 3,200 positions, or 6.5 per cent of the bank’s headcount, marking one of the firm’s largest rounds of job reductions ever. The move was meant to address rising expenses and falling revenue and profit.

Slowdowns in various business lines, an expensive consumer-banking foray and an uncertain outlook for markets and the economy are prompting the bank to rein in costs. Merger activity and fees from raising money for companies have taken a hit across Wall Street, and a slump in asset prices has crimped another source of gains for the New York-based company.

Those broader industry trends have been compounded by the bank’s mistakes in its retail-banking foray, where losses piled up at a much faster rate than forecast.

Goldman plans to host an investor day on Feb 28, only the second in the bank’s history. BLOOMBERG