Summers Suspends Citigroup Ties While Considered for Fed

[cali]

Former U.S. Treasury Secretary Lawrence Summers has suspended ties with Citigroup Inc. (C) while the White House considers nominating him to serve as the Federal Reserve’s next chairman, the company said.

“Mr. Summers has withdrawn from participation in all Citi events while he is under consideration to be chairman of the Federal Reserve,” Danielle Romero-Apsilos, a spokeswoman for the firm, said yesterday in an e-mailed statement.

Summers, a Harvard University Professor and former top economic adviser to President Barack Obama, was to give the keynote address on challenges to the global economy at a Citigroup research seminar Oct. 13, according to an invitation on the website for the firm, the third-biggest U.S. lender. The Washington event coincides with the annual meetings of the World Bank and the International Monetary Fund.

Citigroup hired Summers, 58, “for small private-bank client and institutional client meetings,” Romero-Apsilos said in an earlier e-mailed statement. He provided “insight on a broad range of topics including the global and domestic economy.”

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http://www.bloomberg.com/news/2013-09-13/summers-suspends-citigroup-ties-while-considered-for-fed.html

[hobbit709]

1. Whoop de do.

[jakeXT]

2. “The Committee to Save the World”

Weissman notes that Glass-Steagall remained law until 1998, when Citicorp and Travelers Group announced they were merging:

Such a combination of banking and insurance companies was illegal under the Bank Holding Company Act, but was excused due to a loophole that provided a two-year review period of proposed mergers. The merger was premised on the expectation that Glass-Steagall would be repealed. Citigroup’s co-chairs Sandy Weill and John Reed led a swarm of industry executives and lobbyists who trammeled the halls of Congress to make sure a deal was cut. But as the deal-making on the bill moved into its final phase in Fall 1999, fears ran high that the entire exercise would collapse. (Reed now says repeal of Glass-Steagall was a mistake.)

Robert Rubin stepped into the breach. Having recently stepped aside as Treasury Secretary, Rubin was at the time negotiating the terms of his next job as an executive without portfolio at Citigroup. But this was not public knowledge at the time. Deploying the credibility built up as part of what the media had labeled “The Committee to Save the World” (Rubin, Fed Chair Alan Greenspan and then-Deputy Treasury Secretary Lawrence Summers, so named for their interventions in addressing the Asian financial crisis in 1997), Rubin helped broker the final deal

http://www.rooseveltinstitute.org/new-roosevelt/looking-back-repeal-glass-steagall-or-how-banks-caught-casino-fever