Long-time Goldman Sachs (GS) CEO Lloyd Blankfein lamented on the challenges of running a publicly-traded company.
“Look at the anguishing you’re seeing in the press now for where Aramco is going to list. In other words, we have, in an effort to make our markets pristine, which is a laudatory goal and complex, and the litigation standards it is, I mean, I will tell you, not everything about being a public company CEO is as attractive as it must look to you,” Blankfein said during a Q&A at the Economic Club of New York this week.
The issue is that as regulations become tougher companies will not want to go public, resulting in a “two-track system.”
“You’ll have very, very tough regulation on companies that are public companies and increasingly companies that defer going public with the consequence that their investors aren’t remotely well protected, and possibly a Theranos. So what do you want?” Blankfein said.
Earlier in the conversation, Blankfein acknowledged that there’s “room for some adjustment” with regulation that was implemented following the financial crisis.
“I don’t want to get away from lauding the regulators at the time and the people in the public sector for the way the handled the war that was in the fog of war and the aftermath. All you have to do is juxtapose how the U.S. financial system responded and how quickly it regained its footing compared to counterparties in Europe.”
Blankfein also pointed out that there are fewer publicly-traded companies today. Last summer at the Economic Club of New York, SEC Chairman Jay Clayton noted that there’s been a “roughly 50% decline” in the number of publicly-traded companies in the U.S. over the last two decades. He called this a “serious issue” for the markets and the country.
Goldman Sachs, one of the oldest investment banks that had been a traditional-style partnership, went public in 1999.
Blankfein, 63, is one of two remaining bulge bracket bank CEOs from the financial crisis. He’s expected to step down by the end of the year.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter. Email tips to firstname.lastname@example.org.