Goldman Chief Shrugs Off Writedown Rumors

Goldman has been in the crosshairs of scrutiny primarily because it reported soaring earnings that were up 79% from a year ago to about $2.9 billion. The stellar performance comes as peer firms such as Citi and Merrill Lynch face a combined hit to their balance sheets of some nearly $20 billion due to bad bets on CDOs.

And more writedowns are expected. Even as Blankfein defended Goldman's own balance sheet, Bank of America(BAC Quote) announced that it is expecting writedowns totaling more than $3 billion in CDOs.

For Goldman's part, Blankfein says the firm has placed a lot of emphasis on risk controls and making employees accountable for performance. "At the end of the day, we're not so prescient that we anticipate all these things and get there five minutes before," he quipped.

Punk Ziegel analyst Richard Bove told TheStreet.com on Friday that he became much more confident with the bank's risk-management protocol and its software systems.

On Monday, the analyst upgraded Goldman's shares from sell to market perform, noting that the investment bank was not immune to losses but was well prepared.

Blankfein also said that Goldman is launching a number of new initiatives, including raising a $1.8 billion fund targeting debt assets. The fund, GS Liquidity Partners, is expected to invest in leveraged loans and other securities that have been hard to sell during the market's liquidity squeeze.