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Goldman's Blankfein: Libor issue undermines system

WASHINGTON (MarketWatch) - Goldman Sachs CEO Lloyd Blankfein on Wednesday said that the recent scandal involving the manipulation of the Libor interest rate is undermining the integrity of the financial system that has already been undermined so substantially. Blankfein, who spoke before the Economics Club of Washington D.C., said "vast parts" of the Dodd-Frank Act, written in the wake of the financial crisis, is good while aspects of it have "gone too far." He argued that the Volcker Rule, which seeks to prohibit speculative trading by big banks, does not address the problems that came to light in the financial crisis. Blankfein added that he was worried about the situation in Europe but that he believed the euro zone would survive. "There is a not-insignificant probability that it would unravel but I don't think it will happen," he said.