Dumb And Dumber

Rubin & Prince, Dumb & Dumber?

To be fair to ex-Citi CEO Chuck Prince, he at least gave the appearance of contrition when he rocked up before the Financial Crisis Inquiry Commission (FCIC) Thursday.

Former Citi executive Robert Rubin, on the other hand, was a little more testy. Prince admitted that he (like many others) didn't see the financial crisis coming, while Rubin made it clear that, despite his $15m-a-year pay pack, it wasn't his job to see it coming anyway.

Here's some sound bites from the hearings:

'I 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'.

Prince

'As we try to recover from this calamity, I'm not so sure apologies are important as assessments of responsibility'.

Phil Angelides, FCIC Chairman

'Regrettably, we were not able to prevent the losses that occurred, but it was not a result of management or board inattention, or a lack of proper reporting information'.

'Everyone, including our risk managers, other banks and CDO structurers, all believed that these securities held virtually no risk. It is hard for me to fault the traders who made the decisions to retain these positions'.

Prince

'You are talking about a level of granularity no board will ever have'.

'Having spent my career in positions with significant operational responsibility - at Treasury and Goldman Sachs - I no longer wanted such a role at this stage of my life, and my agreement with Citi provided that I would have no management of personnel or operations'.

Rubin

'It is absolutely incorrect to suggest that Mr Rubin had central responsibility, or any central responsibility for what happened to Citigroup'.

Prince

'What I've been struck by, in documents and testimony, is how much folks in the organization didn't know what was going on'.

'The two of you, in charge of this organisation, did not seem to have a grip on what was happening'.

'I don't know that you can have it two ways. You were either pulling the levers, or asleep at the switch'.

'You (Rubin) were not a garden-variety board member. I think to most people, chairman of the executive committee of the board of directors implies leadership. Certainly $15m-a-year guaranteed implies leadership and responsibility'.

Angelides

'I'm struck by the fact that we can hide behind the statistical models. Where was the intuitive leadership judgement that said something may not be right in this market ?'

FCIC member John Thompson

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