Goldman profits drop as global economy slows Although profits did not fall as much as Wall Street analysts had feared, the relatively lacklustre results raise questions over whether Goldman can improve its performance in the second half of the year. Lloyd Blankfein, the chairman and chief executive, has insisted that the headwinds facing investment banks are principally to do with the weak economic backdrop rather than the impact of new regulation that has outlawed several activities that used to generate profits for Goldman. In a sign that the bank is not expecting the outlook to improve rapidly, Goldman said it will take further steps to cut costs. About 1,000 people have already been axed this year, helping Goldman cut its operating expenses almost 25 pc in the second quarter compared with the first. "Market conditions deteriorated and activity levels for both corporate and investing clients were lower given continued instability in Europe and concerns about global growth," said Mr Blankfein. Revenues at its investment bank dropped 17pc to $1.2bn in the quarter as the volume of lucrative work on mergers and acquisitions dried up. The bank's equities trading business was hurt by a decline in broader trading volumes as investors scaled back their appetite for risk. Revenues at its bond and commodity division unexpectedly climbed 37pc to $2.2bn.