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This week, former Chairperson of the Federal Deposit Insurance Corporation, Shelia Bair, released a 415-page chronicle of the 2008 financial crisis; the memoir, Bull by the Horns, disclosed that U.S. Treasury Secretary Timothy Geithner resisted her efforts to replace Vikram Pandit as Chief Executive Officer of Citigroup (NYSE:C).
According to the memoir, the former chair of the FDIC sought to replace Pandit with Jerry Grundhofer, a Citigroup director and ex-CEO of U.S. Bancorp (NYSE:USB).
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“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.”
In her words, Bair believed that Pandit lacked the commercial-banking experience necessary to make decisions surrounding the banks $45 billion bailout. But Geithner, she asserted, was more interested in shielding the bank with the bailout than protecting taxpayers.
Yet taxpayers made a profit of approximately $12 billion off the bailout, a point that Bair did note in her memoir. While she conceded that the Treasury sold its shares in Citigroup for a profit, she tempered her acknowledgement by saying, “Of course, Tim did not know whether Treasury’s investment would pay off at the time, and it still troubles me that he could so readily subordinate the government’s interest to those of private shareholders.”
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