{"id":520702,"date":"2010-04-08T15:15:34","date_gmt":"2010-04-08T19:15:34","guid":{"rendered":"http:\/\/washingtonindependent.com\/?p=81712"},"modified":"2010-04-08T15:15:34","modified_gmt":"2010-04-08T19:15:34","slug":"citi-execs-we-are-sorry-in-general-but-not-in-particular","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/520702","title":{"rendered":"Citi Execs: We Are Sorry in General, But Not in Particular"},"content":{"rendered":"

This morning, the Financial Crisis Inquiry Commission heard<\/a> from Robert Rubin and Charles Prince, the former heads of banking behemoth Citigroup.<\/p>\n

Prince opened his remarks with regrets. \u201cI\u2019m sorry,\u201d he said. \u201cI\u2019m sorry the financial crisis has had such a devastating impact for our country. I\u2019m sorry about the millions of people, average Americans, who lost their homes. And I\u2019m sorry that our management team, starting with me, like so many others could not see the unprecedented market collapse that lay before us.”\u00a0(The apologia deviated from Prince\u2019s prepared statement<\/a>, which read: \u201cI can only say that I am deeply sorry that our management, starting with me, was not more prescient and that we did not foresee what lay before us.\u201d)<\/span><\/p>\n

Such candor was unexpected and, at least judging the faces of the commissioners, welcome. But hours of rationalization, blame shifting, and evasion followed during questioning that at times became heated. Indeed, while Rubin and Prince expressed regret in general, they refused to classify their own or any of Citigroup\u2019s actions as anything other than mistakes made in the run-up to an unforeseeable bust.<\/p>\n

The commissioners’ questions focused on mortgage-backed securities, the housing bubble, derivatives regulation, Citigroup’s losses and the problem of too big to fail. \u201cI personally do not think Citi was too big to manage,\u201d Prince said, a sentiment Rubin echoed. Prince said the \u201cbroad, multifaceted and diversified nature\u201d of Citigroup\u2019s investments and liabilities did not \u201cmaterially contribut[e] to our losses.\u201d<\/p>\n

That statement jarred with Rubin\u2019s\u00a0testimony; he cited the interconnectedness of financial firms and financial products, which undercut diversification, as particularly destructive during the financial crisis. Asked why he did not recognize the extent of Citigroup\u2019s liabilities until too late, the former Treasury Secretary defensively noted that Citigroup managed \u201ctrillions\u201d of dollars every day and the best risk management the company could perform was to put the \u201cright people\u201d in place. He also called Citigroup\u2019s risk management \u201crobust and proactive.\u201d<\/p>\n

FCIC Chair Phil Angelides later pointedly asked Rubin, \u201cDo you bear central responsibility for the near-collapse, but for the government, of Citigroup?\u201d He\u00a0replied that Citigroup\u2019s board, which he led, was not \u201ca substantive part of the decision-making process\u201d at the firm. \u201cAll of us in the industry failed to see the potential for this serious crisis. We failed to see the multiple factors at work.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

This morning, the Financial Crisis Inquiry Commission heard from Robert Rubin and Charles Prince, the former heads of banking behemoth Citigroup. Prince opened his remarks with regrets. \u201cI\u2019m sorry,\u201d he said. \u201cI\u2019m sorry the financial crisis has had such a devastating impact for our country. I\u2019m sorry about the millions of people, average Americans, who […]<\/p>\n","protected":false},"author":6662,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-520702","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/520702","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/6662"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=520702"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/520702\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=520702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=520702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=520702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}