As the federal government shutdown drags on, economic impacts are likely to be felt, Goldman Sachs CEO David Solomon said Thursday.
“We’re getting to that point,” the chief executive told David Rubenstein during an event at The Economic Club in Washington, D.C. The shutdown began Oct. 1.
Rubenstein, the nonprofit’s chairman who’s also co-founder and co-chair of the Carlyle Group, peppered Solomon with a number of questions related to artificial intelligence, Goldman’s return-to-office policy, digital assets and central bank independence.
Here are some of the most notable comments made by Solomon, who’s been at the helm of the Wall Street bank since 2018.
1. AI’s effect on jobs. The technology offers “an opportunity to really look at processes and completely reimagine them in a way where you can create automation and efficiency and therefore have the capability to invest much more in growth of the business,” Solomon said. “And that will affect some jobs in the firm, or shift jobs in the firm.”
“The firm is much more productive on a revenue-per-employee basis today than it’s ever been, and it will be much more productive as we go forward, but that doesn't mean we will have less people. It means we have an opportunity to have more valuable people doing more valuable things to serve our clients and grow our franchise.”
2. In-office policy: “We don't have a policy. We work,” Solomon told Rubenstein.
“Ours is a culture of teamwork and collaboration and apprenticeship, and that works when people come together,” he said. “People also travel to see clients, and people also have busy, complex lives, and we have to give them flexibility. We did that before COVID. We do that now.”
“Fundamentally, people show up. They work. We don't have rules. They get their jobs done. They're accountable. They're present. And we come together.”
“So you don't care if they're in the office five days or three days, as long as the job gets done?” Rubenstein asked.
“As long as they're doing what they need to do,” Solomon replied. “And part of what you need to do is you need to be present.”
Young workers joining Goldman want to be in the office and want senior people around them, so they can learn, he asserted.
“We have to create an environment where people are spending time with people, where people are spending time with clients,” Solomon said. “These technology tools are fantastic. Zoom's an unbelievable tool, but it's a tool. It's not a mode of operating successfully at the competitive level we want to operate at.”
3. Investment banker hours. “We realized 10 years ago – and this was back when I was running investment banking – that we had to put guardrails around the process. And so we started trying to give guidance, putting guardrails, trying to block time off for people, and generally, I think we've done a pretty good job,” Solomon said. “We have a lot of data, as you would imagine, we can understand because people are online, or people are physically present. And I think our guardrails are pretty good around that, certainly much better than they were 10 years ago.”
With 24/7 connectivity, it’s become harder to leave work at the office, he insinuated, so young workers need guidelines.
“We want people to work hard, but there need to be expectation sets, and you can't do it all,” Solomon said. “And so we try to get that balance right. It doesn't mean we get it right all the time, but I think we do better at it.”
4. Representation of women. Solomon estimated women make up about 41% of the bank’s employee base.
“We've made a bunch of progress, especially in the senior ranks, but, candidly, not enough, and we continue to be focused on creating opportunities,” Solomon said. “To get to the top of the funnel, it's a long, long road. And the sample set, I remember in my training class, it was 90/10, men to women, 42 years ago.”
5. Central bank independence. It’s “served us very, very well. And I think it’s something that we should speak out for, we should strive for, and I think it’s important.”
The line of questioning comes in response not only to the Trump administration’s pressure on Federal Reserve Chair Jerome Powell this summer – and subsequent attempt to fire Fed Gov. Lisa Cook – but on a list of candidates to succeed Powell, whose term ends in May.
Solomon declined to comment on the potential Fed chair nominees. Treasury Secretary Scott Bessent plans to conduct a second round of interviews next month with five candidates, The Wall Street Journal reported. That list surfaced Monday and included current Fed Govs. Michelle Bowman and Christopher Waller, former Fed Gov. Kevin Warsh, White House National Economic Council Director Kevin Hassett and BlackRock executive Rick Rieder.
“All five individuals carry skills and experience that could make them incredible candidates to be a Fed chair. I think we all know that there’s one person that’s going to make that decision,” Solomon said, referencing but not naming President Donald Trump.
6. AI bubble concerns. “The opportunity set with AI is enormous. There will be winners and losers, and it's hard to pick the winners and losers now,” Solomon said. “Certainly, a lot of the capital that's being deployed will not produce adequate returns. And a bunch of the capital that's being deployed will actually not produce any returns. But it's hard to call the timing on these things.”
7. Digital assets. Solomon said he is “a big believer” in blockchain technology “and the ability for us to change the financial infrastructure, the rails.”
Tokenization, digitization, stablecoin – “it’s coming, it’s coming at a very quick pace, and to the degree that it increases speed, reduces friction and allows for a more secure system, I think that’s a very, very good thing,” he said.
