Ex-Goldman CEO Blankfein says bank rout may depress growth, even with robust capital

NEW YORK, March 19 (Reuters) - Turmoil in the banking sector will probably weigh on economic growth as lenders become more conservative, former Goldman Sachs Group Inc (GS.N) CEO Lloyd Blankfein said on Sunday.

"The greater risk environment for financials leads to husbanding of capital and risk-taking, less and more conservative investing and lending, and inevitably, lower growth," said Blankfein, who also served as Goldman's chairman, told Reuters.

"While some banks have been hung up by poorly managed, concentrated risk, the overall banking system is extremely well capitalized and substantially more tightly regulated than in prior challenging times," he said.

Blankfein was chairman and CEO of the storied Wall Street firm from 2006 to 2018, steering it through the global financial crisis of 2008 and its aftermath.

He spoke after some of the world's largest central banks came together on Sunday to stop a banking crisis from spreading as Swiss authorities persuaded UBS Group AG (UBSG.S) on Sunday to buy rival Credit Suisse Group AG (CSGN.S) in a historic deal.

Reporting by Lananh Nguyen; Editing by Tom Hogue

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Lananh Nguyen is the U.S. finance editor at Reuters in New York, leading coverage of U.S. banks. She joined Reuters in 2022 after reporting on Wall Street at The New York Times. Lananh spent more than a decade at Bloomberg News in New York and London, where she wrote extensively about banking and financial markets, and she previously worked at Dow Jones Newswires/The Wall Street Journal. Lananh holds a B.A. in political science from Tufts University and an M.Sc. in finance and economic policy from the University of London.