Goldman Sachs Group Inc (GS.N) Chief Financial Officer Harvey Schwartz said on Tuesday that Wall Street banks will have to produce higher returns for shareholders, and may need to cut staff further in order to do so.
"The industry will migrate to higher returns because it will have to," Schwartz said at a Credit Suisse conference in Miami, adding that investment banks may do so by taking "excess capacity" out of the industry.
Schwartz, who took over the CFO role at the end of last month, declined to provide a specific return-on-equity target for Goldman Sachs or a time frame for getting returns up to an adequate level.
Last year, Goldman delivered a return-on-equity of 10.8 percent. Schwartz said that was good on a relative basis, but not "aspirational for the long term." The measure is important to shareholders because it measures how much profit a bank can wring from its balance sheet.
"Shareholders are demanding more accountability," he said.