Friday, January 9, 2009

The Robert Rubin Wing of Goldman Sachs Is Closed

Under continuing fire, Robert Rubin has resigned from Citigroup. Other than providing access to government coffers under favorable conditions, which kept Citigroup alive and prevented it from going the way of Lehman Bros., Bear Stearns and others, Rubin's period at Citi was viewed as a disaster, by many.

Rubin is stepping down as senior counselor, immediately. He will remain a director until the bank's annual meeting later this year.

In his resignation letter, Rubin admitted to not having foreseen the credit crisis and market deterioration, which caused roughly 88 percent of Citigroup's share price to evaporate over the last two years.

The bank has taken $45 billion from the government's Troubled Asset Relief Program, and in November won a federal bailout that will limit losses on $306 billion of toxic assets. Rubin played a major role in garnering these funds on favorable terms for Citi, but shareholder activists were more concerned with Rubin's role in the poor management of Citi. The activists have won with the departure of Rubin. Now, however, they have to run Citi without the access and protection Rubin provided. They obviously thought his price tag ($17 mllion per year) was too much for access, when he garbled everything else up.

It'll be back to polishing up government contacts for Rubin, now.

Rubin said he plans to focus more on outside activities and organizations, and "intensify" his work in public policy. He has worked on a transitional economic advisory board for President-elect Barack Obama.

No comments:

Post a Comment