By Stephanie Kirchgaessner and Tom Braithwaite in Washington and Suzanne Kapner and Francesco Guerrera in New York
Published: May 13 2010 23:17
Lloyd Blankfein, Goldman Sachs chief executive, is playing a personal role in helping to arrange a $125m rescue for a Chicago community bank
which provides loans to lower-income communities, people familiar with the matter say.
The lender, ShoreBank, was told by the Federal Deposit Insurance Corporation in March that it had 60 days to raise capital or risk being seized. Mr Blankfein has been making phone calls to rally support for a deal that would see some of the country’s biggest financial groups help the Chicago community bank.
Mr Blankfein’s efforts come as Goldman responds to a barrage of negative publicity, much of it involving civil fraud charges filed against the bank last month by the Securities and Exchange Commission. Goldman has denied any wrongdoing.
Under the terms being discussed, Goldman would inject about $25m into the bank and Citigroup about $20m. Other potential investors include Bank of America, Morgan Stanley, JPMorgan Chase, US Bancorp and State Farm as well as non-profit organisations that are already investors in the bank.