A bipartisan commission on Capitol Hill continued its probe into the financial meltdown today. The chairman is familiar to Californians - he served as state treasurer for eight years.
Phil Angelides now chairs the Financial Crisis Inquiry Commission. He said Citigroup executives told the board of directors in 2007 that the banking giant was stuck with $55 billion in shaky assets. But that’s not what they told the public. Angelides asked Citigroup’s former boss to explain.
"Why is there an announcement made to the public that it’s $13 billion at the same time that the board and the audit, risk and audit committee are being told that it’s substantially more?" he asked.
Former Citigroup chief Charles Prince said late 2007 was an “unprecedented time” of financial markets crashing and credit ratings falling. The assets had Triple-A bond ratings; Citigroup executives thought they were safe.
"And I think that their view of what the exposure was to subprime changed over this period of time as these events happened."
What Citigroup thought was safe was actually garbage. Prince apologized for not realizing that earlier. The Financial Crisis Inquiry Commission will report to Congress and the president by the end of this year.