Robert Rubin, the wise man of Citigroup, who has received 115 million plus stock options since 1999 apparently to be an ornament hanging next to the CEO's office, defended his role as a member of the Board and senior advisor by saying Citigroup's near collapse was due to the buckling of the financial system.
Rubin claims that he was just an innocent bystander and peripheral to everything happening at the bank while acknowledging that he was involved in the decision to ramp up risk taking while he was stating that investors were taking too much risk. WSJ.com
Apparently, it is not the job of either the senior managers or Board members to be informed about the kind of risks being taken by the bank, even when those risks total say 50 billion in CDO garbage, or to insure that proper risk control measures are in place. The WSJ and N Y Post called for the resignation of the Board. Reuters For almost two years, I have been reading stories about the developing fiasco in the mortgage market. It was not difficult for anyone to see serious problems in the mortgage market since early 2007.
Apparently, Rubin does not read the papers or try to stay informed about major events impacting the operations of the bank paying him millions each year to give senior managers the benefit of his wisdom and experience. Why did he fail to monitor and question what the bank was doing with mortgage securities in early 2007 when the importance was evident even to a casual reader of the financial news.
Why does Citi need a bailout and J P Morgon does not? It is an outrage that the members of the Board still have their jobs with each taxpayer having to guarantee $1000 of CITI's toxic assets as pointed out in the WSJ editorial. I can understand why Rubin went to the WSJ to defend himself rather than the NYT, which ran a scathing article about the senior leadership at Citigroup including Rubin. NYT
And two of my prior posts:
Rubin defending himself to a WSJ reporter is like a Republican going to FOX to receive the "tough" questions.