May 1 Goldman Sachs Group Inc's leverage
- funding of its balance sheet with debt - is at a record low,
down nearly 60 percent since the financial crisis, Chief
Financial Officer Harvey Schwartz said on Thursday.
At the end of the first quarter, each dollar of Goldman's
capital supported $11.60 worth of assets, down 56 percent from
$26.20 at the end of 2007. Excluding cash, segregated cash and
securities and collateralized agreements, leverage has dropped
an even sharper 59 percent over that period.
"The reduction in risk combined with a significantly higher
level of equity had driven leverage to a record low," Schwartz
said on a conference call with fixed-income investors.
During the financial crisis, investors lost faith in banks
that were highly leveraged because as assets deteriorated, it
became more difficult to make good on their obligations.
(Reporting by Lauren Tara LaCapra in New York; Editing by Lisa