“I’m sorry. These are people I love and care about. You could imagine emotionally it’s not easy to see what’s happened.”
-John S. Reed, retired Chairman and CEO of Citibank, on why the Congress was wrong to repeal the Depression-era Glass- Steagall Act in 1999
A fascinating mea culpa from former Citi CEO John Reed.
I always find it intriguing when people who were once at the pinnacle at their profession (raking in the bucks), when they suddenly have their existential crises and personal epiphanies. The realization that their lives meant nothing, or worse, that their entire existence was far from the benign experience they had previously self rationalized. Especially when there have been some very ugly repercussions to their actions and it hits all at once.
OK, that’s enough pop psychology for a Sunday. I give him credit for at least making the effort to recognize the error and fix it. There is a laundry list of fools who did no such thing.
“John S. Reed, who helped engineer the merger that created Citigroup Inc., apologized for his role in building a company that has taken $45 billion in direct U.S. aid and said banks that big should be divided into separate parts.
Citigroup was formed in 1998 when Citicorp, a commercial bank, combined with Sanford I. Weill’s Travelers Group Inc., which owned the investment firm Salomon Smith Barney Holdings Inc. The New York-based company lost $27.7 billion in 2008 and took $118 billion in writedowns. Now 34 percent-owned by the Treasury Department, Citigroup sought help in the wake of a credit freeze that claimed three of Wall Street’s biggest firms and led to the deepest recession in 70 years.
Congress’ overhaul of U.S. financial regulations should include ordering banks to hold more capital, ensuring executives’ compensation is aligned with long-term profitability and banning firms that take deposits from also engaging in equities and fixed-income trading, Reed said.
Good stuff . . .
Reed Says ‘I’m Sorry’ for Role in Creating Citigroup
Bloomberg, Nov. 6 2009