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Crisis Panel Hot Seat Awaits Rubin and Prince

Get ready for Round Two in the search for answers about why the financial system nearly collapsed in 2008.

The Financial Crisis Inquiry Commission said Wednesday that it would question a number of financial executives and government officials during three days of hearings next week. Among those scheduled to testify are Alan Greenspan, the former Federal Reserve chairman; Charles O. Prince, a former chief executive of Citigroup, and Robert E. Rubin, the former Treasury secretary who was once an influential member of Citi’s board.

Vikram S. Pandit, Citigroup’s current chief executive, is not listed among the witnesses being called by the commission. Mr. Pandit faced tough questions about the soundness of Citigroup and its use of bailout money when he appeared before the Congressional Oversight Panel early in March.

Among other topics, the Financial Crisis Inquiry Commission will be looking into how subprime mortgage loans and securities led to the problems that forced Citigroup to need two government bailouts totaling $45 billion to survive. David C. Bushnell, Citi’s former chief risk officer, has also been called to testify.

Citigroup has already repaid $20 billion of the bailout money from the Troubled Asset Relief Program, while government retained a $25 billion investment in the bank, which was converted to 7.7 billion shares of common stock. Last week, the The Treasury Department announced it would sell off its 27 percent stake in Citigroup over the course of the year.

The commission will also consider the problems at Fannie Mae, which along with its mortgage-buying sibling Freddie Mac was effectively nationalized by the government in 2008. Also among the witnesses are two former executives of Fannie Mae and two of the company’s former regulators.

The hearings are scheduled for April 7, 8 and 9.

In Round One of the hearings in January, the chief executives of Goldman Sachs, JPMorgan Chase, Morgan Stanley and Bank of America came under sharp questioning by commission members, with the most barbed remarks being aimed at Lloyd C. Blankfein of Goldman.

The 10-member commission is charged with delivering a comprehensive report to President Obama by Dec. 15 on the causes of the financial crisis, from mortgage fraud to regulatory failings.

Go to Press Release from the Financial Crisis Inquiry Commission (pdf) »
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3 Comments

  1. 1. March 31, 2010 7:44 pm Link

    Another photo-opp. Duh…Hello…. Books have been written on this already.
    Is this why America is slowing floating out to sea?

    Let me give you a hint. Until you politicans stop with the ‘fox running the hen house mentality’, we will be saluting China sooner than necessary.

    Start with a total reform of your political contribution policy. Currently, Wall Street runs Washingtion. You know it, we all know it. Get the Sachs’, Morgans’, Citi’s’, etc., out of our government. Grow some balls.

    — James Dion
  2. 2. March 31, 2010 7:56 pm Link

    Bob Rubin really should shoulder a significant amount of the blame for Citi’s demise. He was one of the highest paid Citi executives for years, and was the most capable and financially astute individual on the Citi board. If anyone could have prevented the catastrophic events that unfolded at Citi it was Bob. Bob, more than anyone else was asleep at the wheel. He should be roundly criticized for both his complicity and involvement with Citi’s missteps and failures. He did little more than collect a paycheck.

    — Ben
  3. 3. April 1, 2010 12:33 am Link

    Do we really need another Financial Crisis Inquiry Commission report? I just hope that they do not start a coulda, woulda, shoulda match with a little health care reform dressing……………….

    — Charles

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