WASHINGTON — Two former Citigroup Inc. executives apologized Thursday for the bank's role in the financial crisis while at the same time absolving themselves of any role in the problems that resulted in the bank being rescued by taxpayers.
Former chief executive Charles Prince and former board member and ex-Treasury Secretary Robert Rubin both expressed general regret for the bank's problems, with Prince opening his appearance before the Financial Crisis Inquiry Commission by saying "I'm sorry." But both also suggested they were unaware of problems with collateralized debt obligations that were eventually written down to the tune of $30 billion.
"Given the universal perception that these super-senior positions were extremely low-risk, it is hard for me to fault the traders who made the decisions to retain these positions," Prince said.
Rubin offered a similar argument, suggesting he did not know until September 2007 about the bank's exposure to the collateralized debt, which he said "appeared to bear de minimis risk of default."
"I feel confident that the relevant personnel believed in good faith that more senior-level consideration of these particular positions was unnecessary," he said.
Members of the bipartisan, 10-member commission, which was created by Congress to probe the causes of the financial crisis, questioned the idea that executives took such a hands-off approach to a risk that caused so many problems for the bank.
"Your argument is you didn't know," said former Rep. Bill Thomas (R., Calif.), who slammed the argument made by executives that Citigroup was not alone on Wall Street in getting involved with risky financial products.
"You weren't going to be the lemming that stopped and said 'I don't want to keep walking'," he said.
Prince noted that even the federal regulators assigned to the bank didn't raise concerns about the products that led to Citigroup's problems.
"I think that the mistake that was made by everyone about the value of these instruments was fundamentally also made by the regulators," Prince said.