New Goldman CFO Shrugged Off Black Monday Start

Harvey Schwartz takes over as finance chief as bank's business model is called into question.

Harvey M. Schwartz, who will succeed David A. Viniar as Goldman Sachs Group Inc.’s chief financial officer in January, learned early in his career about tough times on Wall Street.

The 6-foot-4 Rutgers University graduate watched tears stream down the face of a middle-aged colleague as the stock market crashed on Oct. 19, 1987. Two years later, he was working at Citicorp when the bank cut thousands of jobs.

Blankfein, Cohn

In 1989, Schwartz took a job at Citicorp, then the largest U.S. bank, where his early roles included consolidating contracts with vendors as the firm scaled back operations, said the people who have heard him describe his career.

‘Step Back’

One of them is Susan J. “Susie” Scher, a New York-based partner in the investment-banking division.

CFO Salary

Viniar, as the only CFO Goldman Sachs has had in 13 years as a public company, helped manage the transition from a partnership and played a key role in navigating the financial crisis. The CFO, not the CEO, speaks to investors and analysts on quarterly earnings calls, making him one of the bank’s most public figures.

Senate Investigation

One Viniar action that received particular notice was his Dec. 16, 2006, instruction to the firm’s mortgage division to reduce its holding of assets tied to home loans. The decision proved fateful: In 2007, as competitors including Bear Stearns Cos., Citigroup Inc. and Merrill Lynch & Co. racked up losses related to subprime home loans, Goldman Sachs posted its biggest profit ever and paid record bonuses.

‘Harvey’s Desk’

As one of two co-heads in the U.S. and a member of the firm’s risk committee since April 2008, Schwartz was forced to wrestle with decisions about how to protect Goldman Sachs and allocate capital as the crisis led the firm to sell assets and hold more cash and other liquid securities.

‘Lackluster Student’

A native of Morristown, New Jersey, Schwartz has donated more than $1.5 million to provide financial aid to students attending Rutgers, according to Douglas Greenberg, a history professor at the university who was dean of the school of arts and sciences when he met Schwartz about four years ago. Schwartz also established a network of Rutgers alumni at Wall Street firms who help provide students and graduates with internships and jobs, Greenberg said.

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