Goldman Sachs at BAML Conference Notes

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Goldman Sachs Group (GS) Presents at Bank of America Merrill Lynch Banking & Financial Services Conference
Harvey Schwartz – Executive Vice President and Chief Financial Officer

You don’t have a lot of transparency into firm specific operations

“I know you don’t have a lot of information in terms of transparency into firm specifics and we don’t have a lot of transparency into competitors, so I know we all tend to rely collectively on revenues. But I think it is fair to say revenues and activity for the entire industry have been generally declining for a number of years.”

Now it doesn’t seem surprising that we’re in an M&A boom but it would have been looking back

“it doesn’t seem surprising to people that we are in an M&A boom, but if you were talking in 2009 and 2010, and 2011, we might have not seen that formulating. I think looking back is it surprising.”

Chain of interconnectivity across businesses

“Small company needs capital. We provide either equity capital to private enterprise. Equity capital could be mezzanine financing, could be some form of preferred but let’s call it the lower part of the capital stack. Over time, that company growth it becomes public. They may elect to use Goldman Sachs as one of their firms that takes them public. When there is monetization event, the entrepreneurs that created that enterprise now have a personal wealth event. So, they may become a client in our private wealth business and then we may lend to them.”

We’ve never really stress tested the rules that were put in place

“I think the biggest question for all us out there is we never really been stress tested truly through a more volatile market environment. And we don’t really have a good way of assessing the collective impact of all the rules whether it’s capital liquidity derivatives, regional rules. I think that’s a very hard thing to assess and so collectively I think over a number of years we are all going to have to keep a very close watch on it. “