Banking Crisis

Former Citigroup CEO Weill Blames Bank Woes On Hiring Decisions

Tom Burroughes Editor London 4 January 2010

Former Citigroup CEO Weill Blames Bank Woes On Hiring Decisions

Ruefully commenting on personnel changes at Citi in the previous decade, its former chief executive, Sanford Weill, has pinned the bank’s woes on hiring decisions and faulted his successor, Chuck Prince, for allowing the firm to take on heavy risks, according to the New York Times.

"One of the major mistakes that I made was my recommending Chuck Prince," Mr Weill was quoted saying to the newspaper, referring to his successor, who headed Citi from 2003 to 2007.

Citigroup, which has a substantial private banking business, has been one of the casualties of the financial turmoil over the past two years and has been bailed out with US public funds under the Troubled Asset Relief Program. However, at the end of last year, the firm repaid $20 billion to the US government.

The credit crisis, and the political and economic fallout that ensued, has led to the role played by bank executives being put under the microscope. Already, bankers’ bonuses have been singled out for criticism as having encouraged risky lending practices. In defences, bankers have argued that some of the problems stemmed from excessively loose central bank monetary policy and counter-productive banking regulations.

Mr Weill, who retired as CEO in 2003 and as chairman in 2006, was quoted saying that Citi's structure was not to blame for the bank's woes, saying it was management that failed.

Weill, 76, also told the Times he wished things had worked out better with Jamie Dimon, his former protege, who is now chief executive of JPMorgan Chase & Co, saying the problem was that in 1999, Mr Dimon wanted to be CEO and Weill was not ready to retire.

The newspaper said that Mr Prince and Mr Dimon declined to comment.

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