Massachusetts senator Elizabeth Warren has criticised investment bank Goldman Sachs after its CEO said Democratic candidate and joint frontrunner Bernie Sanders had created a dangerous environment in America by speaking out against the Wall Street giant.

In an interview with the International Business Times US, Warren – whose endorsement is sought by both Sanders and rival Hillary Clinton – attacked Goldman Sachs chief Lloyd Blankfein, who Sanders had cited as a prime example of corporate greed that is harming the US.

"He thinks it's fine to prosecute small business owners, it's fine to go hard after individuals who have no real resources, but don't criticise companies like Goldman Sachs and their very, very important CEO – that's what he's really saying," Warren said.

Sanders has been critical of Goldman Sachs and Blankfein as well as of Clinton, who has accepted $675,000 (£461,000) of speaking fees and $930,000 in campaign contributions from the firm and its executives during her career in US politics, as both a senator and Secretary of State under Barack Obama. Goldman Sachs has also donated $250,000 to the Clinton family's foundation, according to donation records.

Blankfein responded in an interview on CNBC, saying the environment created by the comment "has the potential to be a dangerous moment – not just for Wall Street, not just for the people who are particularly targeted, but for anybody who is a little bit out of line".

But Warren argued the backlash against Sanders's comments demonstrated the need to focus on the power of Wall Street during the 2016 election. She said: "When Blankfein says that criticising those who break the rules is dangerous to the economy, then he's just repeating another variation of 'too big to fail', 'too big to jail', 'too big even to prosecute'.

"That tells you here we are, seven years after the crisis and these guys still don't get it. Seven years. That crisis cost an estimated $14tn, it cost jobs, it cost homes, it cost retirement funds. And Lloyd Blankfein stands up and says 'Don't even criticise me, I ran a company that was right at the heart of some of the biggest financial frauds in history and made money off it, but don't you dare criticise me'. That's his position? That's why we need voters to get really engaged."

Sanders is running neck and neck with Clinton in the Democratic race to be presidential nominee having effectively tied on delegate votes at the first caucus in Iowa.