Should Lloyd Blankfein have his wings clipped?

As Lloyd Blankfein, chairman and CEO of Goldman Sachs, prepared to defend the investment bank's activities before a US Senate subcommittee today, there was mounting speculation on Wall Street that unless he acquits himself well at the hearing, the bank might have to consider reducing his power and influence.

It would be an astonishing comedown for the man who broke the all-time pay record for Wall Street fees when he earned $70m in 2007, and once told an interviewer: "I'm doing God's work".

Blankfein was due to appear on Capitol Hill today to defend Goldman Sachs's record - specifically, to deny that the bank actually bet against its own clients in the US property market in 2008. He was expected to argue that the bank was only "managing" its risk and that it lost $1.2bn as a result of the collapse in house prices.

Blankfein's appearance follows yesterday's claim by Senator Carl Levin, chairman of the Senate Subcommittee on Investigations, that Goldman Sachs bet on property prices falling in 2008, while selling clients investments that depended on a rising market in order to be profitable.

"Goldman Sachs made billions of dollars from betting against the housing market," said Levin, "and it placed those bets in some cases at the same time it was selling mortgage related securities to its clients. They have a lot to answer for."

In a pre-released text of his testimony, Blankfein said the accusation was simply not true. "We have been a client-centred firm for 140 years and if our clients believe that we don't deserve their trust, we cannot survive," he said.

Blankfein needed to be on good form today, if Charlie Gasparino, author of The Sellout and a Fox Business Network correspondent, is to be believed. He claims that current and former Goldman Sachs partners are wondering if it's time to clip his wings. (Former partners still hold sway because they own considerable stock.)

In a column for The Daily Beast, Gasparino says the firm's business model under Blankfein has put the bank at odds with its clients and that there are those who believe he should be forced to give up some power, such as handing over the chairman's job to "someone who can stem the tide of negative publicity that has engulfed the firm".

If Blankfein gives an uneven performance at today's hearing, says Gasparino, the revolt is likely to gain momentum. The trouble is, Blankfein has given weak performances in these situations before. Watch this space. ·