Your Sunday required reading comes from Eric Dash and Julie Creswell, who do a fine job of reporting on the demise of Citigroup in their New York Times article, "Citigroup Pays for a Rush to Risk." I was expecting the stories of greed, stupidity, and lax internal oversight. What I was not expecting was the way the article portrays Robert Rubin in a much less favorable light than he has been accustomed to from an adoring press corps. Consider this passage, his first mention in the article:
Citigroup insiders and analysts say that Mr. Prince and Mr. Rubin played pivotal roles in the bank’s current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.
When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.
And since joining Citigroup in 1999 as a trusted adviser to the bank’s senior executives, Mr. Rubin, who is an economic adviser on the transition team of President-elect Barack Obama, has sat atop a bank that has been roiled by one financial miscue after another.
Read the whole thing.