Citigroup pays to settle subprime claims

Dick Taffe — Thu, 29 Jul 2010 20:37:41 +0000

Without admitting guilt, Citigroup will pay $75 million to settle federal civil claims that it failed to disclose vast holdings of subprime mortgage investments that crippled the bank during the financial crisis. 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 it’s pretty thin gruel for the government to take back $75 million from a bank in which it alaready owns a controlling interest since bailing it out.

“More meaningful from a policy perspective would be the clawing back of the obscene sums paid to the likes of Robert Rubin for his negligent oversight of the institution.”

Contact Cornelius Hurley, 617-353-5427, ckhurley@bu.edu

AIG bill still hitting taxpayers

Dick Taffe — Thu, 10 Jun 2010 21:42:08 +0000

The Congressional Oversight Panel says in a scathing report that the government failed to exhaust all options before bailing out the insurance giant American International Group – although the rescue did help the financial system avert collapse. Nonetheless, the watchdog panel says taxpayers may never be paid back all of the $182 billion funneled to support AIG. Former Federal Reserve Bank examiner Mark Williams, who teaches finance in the School of Management and is author of “Uncontrolled Risk” about the fall of Lehman Brothers, says the report speaks to the elevated role that policymakers have in conducting stronger risk management.

“Taxpayers deserve better decision making that incorporates basic risk-management tools, including risk measurement, worst-case forecasting, monitoring, and frequent reporting. With significantly more taxpayer money at risk, now it is time for policymakers to exercise better risk management.”

Contact Mark Williams, 617-358-2789, williams@bu.edu

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Citigroup pays to settle subprime claims

AIG bill still hitting taxpayers