Goldman Sachs CEO David Solomon said that he expects that political discussions will target banks in the coming U.S. presidential election.
“I think the tone in Washington as we come into an election will be edgy with respect to our industry,” Solomon said during a financial industry conference Tuesday.
“There’s obviously a lot of political divide with respect to the role financial institutions play,” said Solomon, who took over at New York-based Goldman Sachs in October. “There’s a lot of social issues that will get a lot of debate. In some way, shape or form, I think financial institutions will take some noise and some focus in that discussion.”
At Goldman, Solomon and his management team are grappling with the fallout from the 1MDB scandal, in which one of his bankers admitted to taking part in the looting of a $6.5 billion sovereign investment fund.
It’s too early to tell whether the rhetoric from Washington will lead to changes in legislation, Solomon said.
“It’s something we in the industry will live with as we watch the political process unfold,” he said.
Separately, Solomon said that trading and investment banking activities were “subdued” so far in the first quarter compared to a year ago, when the recent corporate tax cut energized investors.
“Capital markets activity is a little more subdued, both from the shutdown affecting IPOs, and the fact that with such volatility in December that people didn’t hop into the new year ready to go,” he said.