Story updated with new information throughout.
NEW YORK ( TheStreet) -- Goldman Sachs (GS) chief financial officer David Viniar is retiring and becoming a member of the bank's board of directors, in a change he calls "part of the natural evolution," of his role at the firm.
Viniar will be replaced at the end of January, 2013 by Harvey Schwartz, the current co-head of the bank's securities division, in a move that may indicate a closer alignment between Goldman's revenue generating sales, trading and banking businesses with its risk management functions, overseen by outgoing CFO Viniar for 12 years.
Viniar, who spent over three decades at the investment bank, was largely credited with steering the firm through the financial crisis, and in particular, preparing it to weather the housing bust.Given the strength of Goldman's existing risk management team and its balance sheet, Viniar said on a conference call with analysts that the firm is in a position for change. He also highlighted Schwartz as having a "deep understanding of risk management," including the bank's various operational and regulatory challenges, in the wake of the financial crisis. Schwartz said as CFO he will have a "dual mandate," drawing upon experience growing Goldman's institutional and corporate client relationships in securities and investment banking, while maintaining strong management of the bank's balance sheet, imparted by Viniar in his years as CFO. After retiring as CFO, Viniar will join Goldman's board of directors as a non-independent director early next year. Schwartz who has been with Goldman since 1997 and was named partner in 2002, will take the reins of the firm's operations, technology and finance and will co-head its risk committee, the bank said in a statement. Prior to becoming global co-head of Goldman's securities unit, Schwartz held executive positions in sales and investment banking. The move comes at a transitional time for Goldman Sachs as it emerges from the crisis with an earnings outlook colored by new regulations on capital and liquidity, and which prevent the bank from extending itself significantly in proprietary trading or private equity investments. A CFO like Schwartz with experience in banking and securities may help the Goldman target better risk adjusted returns on capital either by growing strong performing units or by cutting capital intensive underperformers, says Michael Wong, a banking sector analyst with Morningstar. Schwartz would be "intimately familiar" with top performing and burdensome trading units, putting him in a position to be decisive about where to deploy capital, says Wong, who echoed Viniar's confidence that the bank is in a position for change. "I don't think the market will take this in a negative way," he adds. "David has made extraordinary contributions to Goldman Sachs over a remarkable 32-year career," said Goldman Sachs chief executive officer Lloyd Blankfein in a statement. "
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