Former Citigroup executives regret banking crisis
Almost three years after Citigroup started to teeter, two of the executives who guided the bank into the center of the financial storm offered their regrets Thursday to a federal committee examining the crisis.
Charles Prince, Citigroup’s former chairman and chief executive, apologized for the billions of dollars of losses that caused the company he helped build to nearly collapse. The bank required three government rescues and some $45 billion in taxpayer aid.
Prince departed sharply from his prepared testimony to offer a deep and extended mea culpa. “Let me start by saying I’m sorry,” he told the commission. “I’m sorry the financial crisis has had such a devastating impact for our country. I’m sorry about the millions of people, average Americans, who lost their homes. And I’m sorry that our management team, starting with me, like so many others could not see the unprecedented market collapse that lay before us.”
Robert Rubin, an influential Citigroup board member and adviser, also showed some contrition, but his testimony stopped short of accepting personal responsibility for the bank’s woes. His stature as one of Wall Street’s wise men — from chief of Goldman Sachs to secretary of the treasury during the Clinton administration — has fallen along with Citi’s stock.
Listing the causes
In his remarks, Rubin cited at least nine causes for the financial crisis, which formed a toxic cocktail that, he claims, “almost all of us” missed.
“We all bear responsibility for not recognizing this, and I deeply regret that,” Rubin said in his testimony.
Phil Angelides, chairman of the bipartisan Financial Crisis Inquiry Commission, pressed Rubin repeatedly on the presence of $40 billion of securities known as super-senior collateralized debt obligations. He expressed disdain for Rubin’s professed lack of awareness about Citigroup’s purchase of the securities.
“You’re talking about a level of granularity that no board would have with respect to the position on its books,” Rubin replied.
Prince, who resigned under pressure in November 2007, now spends much of his time in Palm Beach with his wife. He also works as an adviser to global companies and investors at Albright Stonebridge Group, a consulting firm based in Washington.
Rubin, who left Citigroup early last year, keeps a New York office at the Council of Foreign Relations, where he is a chairman, and has been gearing up to reintroduce the Hamilton Project, the economic policy group that is his Washington power base.
Source: Houston Chronicle