Regulator Tried To Replace Citi's Pandit During Financial Crisis

Unhappy Vikram Pandit

U.S. Treasury Secretary Timothy F. Geithner resisted Sheila Bair’s efforts to replace Vikram Pandit as CEO of Citigroup in early 2009, according to her memoir of the financial crisis.

Bloomberg reports that Pandit was 'handpicked” to be CEO by former Citigroup Chairman and ex-Treasury Secretary Robert Rubin, who is Geithner’s 'mentor and hero', she wrote in 'Bull by the Horns'. Bair, who stepped down last year as chairman of the Federal Deposit Insurance Corp., sought to replace Pandit with Jerry Grundhofer, a Citigroup director and ex-CEO of U.S. Bancorp, according to the book.

'I had been pushing hard for Grundhofer to replace Pandit, and I believe Jerry would have stepped in if Tim had asked him to', Bair wrote. 'But Tim would not take decisive action to replace Bob Rubin’s handpicked choice for CEO, Vikram Pandit'.

Her pursuit of Pandit’s ouster came as he worked to repair Citigroup (C) after it took a $45bn bailout in 2008. Pandit, 55, lacked commercial-banking experience while the company’s management struggled to make decisions, Bair wrote. Geithner, 51, wanted to shield the bank from Bair rather than protecting taxpayers from potential losses at New York-based Citigroup, according to the book.

'Couldn’t we at least bring in an experienced commercial banker to run the place, I asked', wrote Bair, 58. 'Tim resisted, offering a bone instead: that Vikram could hire some more commercial bankers to work for him. I doubted that many senior commercial bankers would be willing to work for Vikram, given his weak reputation, but no one was going to buck Tim'.

Hit the link below to access the complete Bloomberg article:

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