As Congress considers tough new regulations on the financial industry, a Senate panel put executives from Goldman Sachs on the hot seat on Tuesday.
Senators grilled executives about mortgage investments the firm sold while the housing market collapsed.
The Securities and Exchange Commission has filed a fraud suit against Goldman on one set of transactions, saying they were built to fail while Goldman profited by betting against them.
But in his testimony today, CEO Lloyd Blankfein defended the firm's practices. He also thanked the government for the $10 billion bailout Goldman received, pointing out that the company paid back an amount that he says equaled a 23 percent annual return.
During an exchange with Michigan Senator Carl Levin, Blankfein insisted that Goldman's market-making business often requires the firm to end up on the other side of their clients' bets.
“We are the other side of what our clients want to do,” Blankfein said. “The thing we are selling for them is supposed to give them the risk they want.”