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Sept 18 (Reuters) - Goldman Sachs Group Inc (GS.N) is well-positioned to deal with current market conditions, although not immune to it, as the U.S. investment bank has strong capital ratios, healthy liquidity and manageable levels of problem assets, an analyst at UBS said.
“We think Goldman is in a much better position to deal with this storm versus where Bear Stearns, Lehman and Merrill were,” analyst Glenn Schorr wrote in a note to clients.
Still, a crisis of confidence is causing credit default swaps spreads to blow out and stock prices to fall for Goldman and others, Schorr added.
The analyst, who met Goldman’s chief financial officer, David Viniar, said if push came to shove, Goldman had other options.
“While we don’t see any material movement of client balances, we came away pretty confident that management is lining up all viable options and we think there are many financial institutions globally that would love to team up with Goldman in several forms,” Schorr wrote.
Stronger-than-expected earnings from Goldman and Morgan Stanley (MS.N) Tuesday have failed to reassure investors who staged a run on Bear Stearns in March and drove Lehman Brothers Holdings Inc LEHMQ.PK into bankruptcy Monday.
And despite assurances from Goldman and Morgan Stanley — the two remaining major investment banks — that they had ample cash and capital, investors fled, sending their shares lower and boosting their debt-insurance prices higher. The analyst maintained his “neutral” rating and price target of $145 on Goldman stock. Goldman shares were down more than 8 percent at $104.91 before the bell Thursday. They closed at $114.50 Wednesday on the New York Stock Exchange. (Reporting by Tenzin Pema in Bangalore; Editing by Himani Sarkar)