New York: Goldman Sachs Group Inc chief executive Lloyd Blankfein, in written testimony prepared for a Senate hearing yesterday, said his firm did not have a "massive short" and against the housing market and "certainly did not bet against our clients".
Goldman is accused by the US Securities and Exchange Commission of defrauding investors by failing to say that a prominent hedge fund manager bet against a Goldman subprime debt product that he helped design.
Worst days
"We have been a client-centred firm for 140 years and if our clients believe that we don't deserve their trust, we cannot survive," said Blankfein, who along with other Goldman executives, was scheduled to testify before the US Senate's Permanent Subcommittee on Investigations yesterday.
Blankfein said that the SEC charges, filed on April 16, was "one of the worst days in my professional life".
In his testimony, Blankfein says that Goldman lost $1.2 billion (Dh4.4 billion) from activities in the residential housing market during the two years of the financial crisis.
"The fact is we were not consistently or significantly net ‘short the market' in residential mortgage-related products in 2007 and 2008," Blankfein said.
"Our performance in our residential mortgage-related business confirms this."
Blankfein said Goldman, other banks, rating agencies and regulators failed to "sound the alarm that there was too much lending and too much leverage in the system — that credit had become too cheap".
