In October 2008, with the financial system teetering, the U.S. Treasury convened a meeting with the leaders of America’s biggest banks. The agenda: to convince the executives to accept billions of dollars in bailout funds, whether the bank bosses believed their institutions needed it, or not. The story has been told before, now it’s been told again, this time in a new book by Sheila Bair, chairman of the Federal Deposit Insurance Corp. during the financial crisis.
In an excerpt published today in Forbes, Ms. Bair looks back on the meeting and wonders whether “the mammoth assistance to those big institutions” didn’t amount to “overkill”:
We used up resources and political capital that could have been spent on other programs to help more Main Street Americans. And then there was the horrible reputational damage to the financial industry itself. It worked, but could it have been handled differently? That is the question that plagues me to this day.
Which is all fine and good, but what you really want to know is what the former banking regulator thought about the bankers gathered at the Treasury. Well, have no fear:
on Wells Fargo Chairman Richard Kovacevich: “[He]could be rude and abrupt, but he and his bank were very good at managing their business and executing on deals.”
on Citigroup CEO Vikram Pandit: “Pandit looked nervous, and no wonder. More than any other institution represented in that room, his bank was in trouble. Frankly, I doubted that he was up to the job. He had been brought in to clean up the mess at Citi. He had gotten the job with the support of Robert Rubin, the former secretary of the Treasury who now served as Citi’s titular head. I thought Pandit had been a poor choice. He was a hedge fund manager by occupation and one with a mixed record at that. He had no experience as a commercial banker, yet now he was heading one of the biggest banks in the country.”
on Ken Lewis: “He was viewed somewhat as a country bumpkin by the CEOs of the big New York banks, and not completely without justification.”
on Jamie Dimon: “always the grownup in the room”; “a towering figure in height as well as leadership ability.”
on Lloyd Blankfein: “[his] puckish charm and quick wit belied a reputation for tough, if not ruthless, business acumen.”
on John Mack: “the patrician head of Morgan [Stanley]”
on John Thain: “Frankly, I was surprised that he had even been invited. He was younger and less seasoned than the rest of the group.”