Citigroup Executives Offer Mea Culpa for Financial Meltdown—-No Thanks! Get Lost!
by Los Angeles Times
Washington » Two former top executives of Citigroup Inc. on Thursday publicly apologized for the financial crisis and the near collapse of the giant firm that required a taxpayer bailout of $45 billion.
“Let me start by saying I’m sorry. I’m sorry the financial crisis has had such a devastating impact on our country,” former chief executive Chuck Prince told the federal commission investigating the causes of the financial crisis. “I’m sorry that our management team, starting with me, like so many others, did not see the unprecedented market collapse that lay before us.”
Citigroup, like every major bank in America, is unethical from top to bottom. The banking industry has gradually evolved from being the most respected institution in America to the most despised. In the old days the bank president was the most important and most respected person in town. Now there are no bank presidents in town. The big banks have bought up all the small banks and the presidents are officed on Wall Street and spend their days on Pebble Beach, checking their emails to make sure that the underlings are properly ripping off the American people with immoral overdraft charges and usurious interest rates and fees. The banking industry is an American nightmare, the result of unregulated, free market, ideology that has no place in the banking system. Being in the banking business used to be a privilege and required the founders of any bank to have impeccable reputations before being licensed. Now if you work for a bank the first thing you should to do when you go home is to take a shower and get all the dirt off.
Prince’s mea culpa came on the second of three days of hearings by the Financial Crisis Inquiry Commission into the subprime mortgage meltdown. He was followed by former Citi board chairman, Robert Rubin, who expressed regret for the failure of the firm and others to see the approaching financial turmoil.
“Almost all of us in the financial system, including financial firms, regulators, rating agencies, analysts and commentators, missed the powerful combination of forces at work and the serious possibility of a massive crisis,” said Rubin, who served as Treasury secretary under President Bill Clinton. “We all bear responsibility for not recognizing this, and I deeply regret that.”
Citigroup has been the most contrite of the firms that received a major bailout, and because of the large amount of assistance it received, has been a major focus of lawmakers and the panel investigating the crisis.
Last month, Citi’s current chief executive, Vikram Pandit, publicly thanked taxpayers for the $45 billion in federal money that helped save the company in late 2008. The bailout also included a government guarantee of $102 billion for a large part of Citi’s assets. That guarantee has since been removed. Citi in December repaid $20 billion of the bailout. The remaining money was converted into a $27 billion government ownership stake
Prince said risk assessments by Citigroup on about $40 billion of highly rated securities based on subprime mortgages turned out to be “dramatically wrong.” But he said he could not fault company employees for acquiring those assets because of their AAA-plus credit ratings.
The numbers Bailing out a titan
$45 billion » The federal money that helped save the financial titan
$20 billion » What Citi repaid in December
$27 billion » Converted into a government ownership stake