School of Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial law and a former counsel to the Federal Reserve Board of Governors, says the government’s bailout of Citigroup needs more oversight than initially planned.
“Once again, the Treasury has opened its coffers to bail out a private institution without requiring any accountability or oversight.
“If we have learned anything from the current financial crisis it is that the ‘originate to sell’ business model was flawed as it was irresponsible. Citigroup has been a key player in implementing this model and leadership at the ighest board and executive level should be held to account for grossly inadequate risk controls and the firm’s overreaching for yields and fees.
“The U.S. should demand, as part of its investment in Citigroup, that one or more directors be appointed to the Citigroup board to ensure that the shareholders’ and the taxpayers’ interests are properly represented.”