Goldman Downplays Mortgage Exposure

CFO David Viniar chided an analyst, but said the bank isn't a big player in mortgages.
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) --

Goldman Sachs


(GS) - Get Report

exposure to mortgage-related woes is relatively limited compared to other big banks, CFO David Viniar said Tuesday, though he was quick to chide an analyst for misinterpreting his remarks.

"It sounds as though you're saying from a securitizer of mortgage

collateralized debt obligations where you weren't the underlying asset originator, there's not a whole lot of risk of things coming back to you. Am I putting words into your mouth?" asked Sandler O'Neill analyst Jeff Harte.

"Yes," Viniar shot back. "What I said, we weren't that big, in the context of the market, we weren't that big. The situation is fluid. There's not a lot we've seen so far that causes us to think we're going to have that much exposure, but it's very fluid and we don't know yet.

Mortgage giants

Bank of America

(BAC) - Get Report


JPMorgan Chase

(JPM) - Get Report



(C) - Get Report


Wells Fargo

(WFC) - Get Report

have seen their shares get hammered in recent days on fears they could face heavy legal challenges related to their handling of underwriting mortgages and foreclosing on homeowners.

Those fears heated up Tuesday after

Bloomberg News


investor including


(MET) - Get Report

, the Federal Reserve Bank of New York,

Pacific Investment Management Co.


BlackRock Inc.

(BLK) - Get Report

were pressuring Bank of America to buy back billions in mortgages pooled into bonds they own.

Goldman has been in trouble over mortgage-related bonds in the recent past, and paid $550 million to the Securities and Exchange Commission to settle civil fraud charge earlier this year. The SEC had said Goldman defrauded investors to whom it sold those securities. As part of its settlement, Goldman acknowledged the marketing materials contained "incomplete information."

Investors appeared reassured by Viniar's statements, driving Goldman shares up 1.96% Tuesday while shares of most other large banks were sharply lower.


Written by Dan Freed in New York


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