Goldman Sachs executive foreshadows next financial crisis

The second most senior Goldman Sachs executive has warned the world risks sowing the seeds of the next financial crisis through regulation aimed at making banks safer.

Gary Cohn, the global chief operating officer of the Wall St bank, today highlighted the risks of rules forcing banks to hold larger capital buffers so they can absorb bigger losses.

Speaking in Sydney, Mr Cohn said that in forcing banks to hold more capital, regulators risked encouraging the unregulated “shadow” banking sector, so it became the next problem. Continue reading