(DAVOS, Switzerland) – The CEO of Goldman Sachs, a company that received $12.9 billion in federal bailout money, said Wednesday that further regulation on banks by the government will only move risky financial activities elsewhere.
According to a report in the Financial Times, Gary Cohn, Goldman’s top executive, made those remarks at the World Economic Forum, which is a meeting of top economic, business, and political leaders from around the world.
Cohn said that if regulation continued to constrict activities of the major banks, that hedge funds and unregulated businesses would be more apt to undertaking risky business maneuvers. He argued that new rules should not just be given to banks, but that they should be applied across all markets.
Cohn drew strong criticism for his remarks from some observers who claimed that his comments were very self-absorbed, and that he only said that because banks stand to lose business that can easily move elsewhere.
But those who sided with Cohn said that he made a strong point, because if unregulated activities shift to other markets, the risk for another collapse similar to the recent one on Wall Street could happen again.
The report also says that many large hedge funds have lobbied Congress to be left off of a list of areas to be regulated, claiming that they are not strong enough to harm the U.S. financial ecosystem.
Copyright 2011 ABC News Radio