Bailout

Deutch finally leaves the Citi board

By Felix Salmon

John Deutch, one of the many grandees with no financial experience who populated bank boards in the run-up to the financial crisis, is finally stepping down from his sinecure at Citigroup:

“Directors that served on Citi’s board during this financial crisis should rotate off in an orderly fashion,” Mr. Deutch, a chemistry professor at Massachusetts Institute of Technology in Cambridge, Mass., said in an interview Thursday. “My view is that there should be a complete turnover. Now is the time that’s appropriate for me.”

Which sounds very noble, until you realize that Deutch, who lasted 19 months as CIA director in the mid-90s, is actually rather late to this game. As Aaron Elstein writes:

Mr. Deutch, 71, is one of the last to leave from the old regime of Citi directors who apparently snoozed as the bank piled up more than $25 billion in losses in 2008. Five of those directors left the board last year, including former Treasury Secretary Robert Rubin. Mr. Deutch was replaced as chairman of the audit and risk committee last July by Jerry Grundhofer, a former chief executive of U.S. Bancorp.

Interestingly, Deutch waited until he was nominated to the high-level Defense Science Board before he announced his departure from Citigroup. Good to know that helping destroy a systemically-important part of the US economy didn’t disqualify him from that.

Full post as published by Macroprudential on January 08, 2010 (boomark / email).