Posted by CrabbyCon on April 25, 2009 · 1 Comment
Are you getting scared yet America?
Citigroup CEO Vikram Pandit’s job security is increasingly in jeopardy as momentum grows in Washington to oust him.
With the bank stress tests wrapping up, sources tell The Post that regulators think they might have to make the bold move of removing Pandit to signal Washington is taking as hard a line with the banks as it did with General Motors when it effectively ousted GM CEO Rick Wagoner.
The talk of Pandit being dismissed comes amid speculation that a visit to Citi’s offices by Treasury Secretary Timothy Geithner a week and a half ago might have been to discuss a change at the bank’s helm. However, people familiar with the meeting said the visit was simply to conduct a checkup on the bank.
Pandit, who took over in December 2007 from the deposed Charles Prince, has voiced his commitment to breathing life into the troubled bank, and is widely seen as not being part of Citi’s problem.
However, amid criticism that Citi hasn’t moved fast enough to clean up its balance sheet and speculation that Citi may need to raise more cash amid rising writedowns from consumer debt, sources said there’s a growing sense Pandit might have to be sacrificed.
Pandit inherited the mess of Citigroup at the end of 2007 and has done a fairly decent job at getting it back on track or at least moving in the right direction. Obama should know all about inheriting messes, since that’s all he can say when he speaks about the economy – does that mean we can oust him since the economy hasn’t turned around since his election? They run a big risk by doing this of completely demolishing Citigroup and the financial system. Pandit’s strides over the past year and his business strategy going forward have helped the company, but it will take time. If they oust him before real results can be seen, we may see the collapse of this company. But then again, that may be what the government wants in order to force these institutions into nationalization.
This is so completely anti-capitalist it isn’t funny! The government should not be allowed to go over the heads of the board of directors or scare a company into making a decision that befits the government’s agenda. Who in their right mind would ever want to become the CEO of a floundering company, when the MSM has put their entire focus and scrutiny on your job performance without giving you a chance to actually enact the appropriate changes? The government and the MSM turn this into a public side show and a witch hunt – something that the Obama Administration is incredibly good at. They turn the focus off of those who really caused this mess, namely the government and some prominent democrats, and spin it into another AIG debacle. This is shameful.
Credit Suisse has caught onto this game and they’re not happy. They are in fact warning about the over-involvement of the government in private business affairs.
The chairman of Swiss banking giant Credit Suisse on Friday warned against excessive government intervention in the lending policies of banks that have been bailed out by the state.
“In view of the growing number of banks relying on government support, however, I have concerns that excessive state intervention regarding the lending policies of banks or the realignment of their structures could have negative implications for the entire sector,” said Walter Kielholz.
Many of Credit Suisse’s competitors, including local rival UBS, US banks Citigroup and Goldman Sachs, have received state funding to weather the financial crisis.
Credit Suisse has turned to private investors, but has not taken government funds.
Kielholz acknowledged during the bank’s annual general meeting that state intervention had been necessary to prevent a meltdown of the entire financial sector.
However, he said the action by governments to inject funds into banks was already giving rise to a “two-tiered banking system.”
“This has led to a distortion of competition, particularly in the refinancing market or in terms of client guarantees,” he explained.
“There is also uncertainty about how and when governments will be able to exit their stakes in these companies,” he added.
In addition, he cautioned against over-regulation of the sector, saying that while stricter supervision has been prescribed for the sector, the “benefits of additional regulation have yet to be demonstrated.”
“In particular, I believe there is a risk that these changes could be exploited as a means of ushering in protectionist measures,” he warned.
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Filed under Bailouts, Economy, Obama, Obama Administration, Socialism, Treasury, Wall Street · Tagged with Bailouts, Banking, Citigroup, Credit Suisse, Economy, Financial Institutions, Geithner, Nationalization, Obama, Obama Administration, Pandit, Socialism, Treasury, Wall Street
Posted by CrabbyCon on March 26, 2009 · 1 Comment
Excerpt of article:
Treasury Secretary Timothy Geithner told lawmakers that the changes are needed to fix the flaws exposed by the current financial crisis, the worst to hit the country in seven decades.
The goal is to repair a system that has proven “too unstable and fragile,” he said.
“Over the past 18 months, we have faced the most severe global financial crisis in generations,” Geithner said in testimony to the House Financial Services Committee. “To address this will require comprehensive reform. Not modest repairs at the margin, but new rules of the game.”
The administration’s proposal, which will require congressional approval, would represent a major expansion of federal authority over the financial system. It would impose tougher standards on financial institutions judged to be so big that their failure would represent a risk to the entire system.
It also would extend federal regulations for the first time to all trading in financial derivatives, exotic financial instruments such as credit default swaps that were blamed for much of the damage in the meltdown.
The administration also wants larger hedge funds to be required to register with the Securities and Exchange Commission.
In addition, the administration proposed the creation of a systemic risk regulator to monitor the biggest institutions. Geithner did not designate where such authority should reside, but the administration is expected to support awarding this power to the Federal Reserve.
The plan also includes a measure that Geithner and Fed Chairman Ben Bernanke discussed before the committee on Tuesday to give the administration expanded powers to take over major nonbank financial institutions, such as insurance companies and hedge funds that were teetering on the brink of collapse.
Should hedge funds be regulated? Of course they should, but the issue is whether or not they will be, since they have so much control on Capitol Hill. I also have a major concern with those who are stating they will have the oversight responsibility or who really want these regulations. The Federal Reserve, Geithner, Bernake, Barney Frank, Obama, etc. are all responsible for the collapse of the market and had a major role to play in it. Why would I want any of these yahoos having accountability and responsibility for oversight and business management?
Most of these players received kickbacks from Wall Street and hedge fund managers – there is a major principle-agent issue here (conflict of interest).
I have a feeling this is all fancy rhetoric to hide what is really going on here… The nationalization of banks and possibly the intent to nationalize more than financial institutions. The government wants complete power and control to shape society – welcome to Statism.
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