Goldman Sachs (NYSE:GS) sees expansion potential in Europe as the euro crisis steers banks toward reducing their balance sheets, the president of the investment bank said on Thursday.
Gary Cohn said in a presentation at the Sanford C. Bernstein conference in New York that Goldman was going contract by contract to understand what its exposures could be if one or more countries stopped using the euro and reverted to their original currencies.
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Earlier Thursday, the European Commission's top economic official warned the euro zone was at risk, as the currency hit a two-year low against the dollar.
Cohn highlighted the opportunities in deleveraging, as European banks reduce their balance sheets by what he said could be up to $2 trillion.
"We see a really interesting potential -- and potential is the key word -- opportunity in Europe," he said in response to a question about growth on the troubled continent.
"We think we are uniquely positioned, with a handful of other institutions, where we've got the capital, we've got the client contacts, we've got the ability to value and we've got the ability to help European financial institutions move large portions of their balance sheet relatively efficiently," he said.
When asked if Goldman had the potential to make money off of a euro zone breakup, Cohn said it was possible to make money in any environment but the bank was also being cautious about determining its exposures.
"We have done everything you would expect us to do as a prudent risk manager," Cohn said.
He added that the firm was dealing with issues such as its ability to be paid in currencies not mentioned in a particular contract and in what jurisdiction were contracts written.
In 2011, the EMEA region represented about 25 percent of Goldman's net revenue and 19 percent of pretax earnings.