It took an angry call from Bair to Warren Buffett to get Blankfein to start playing team ball with the FDIC. Lloyd called her back within the hour.
UPDATE: A look at Sheila's thoughts on Vikram Pandit, who was fired earlier today.
Wall Street Journal
Former FDIC Chairman Sheila Bair’s new book, Bull by the Horns on her time during the financial crisis is out, and it’s juicy. Here’s a quick look at what she had to say about some of the country’s top bankers.
On Vikram Pandit
It's pretty well known that Citigroup CEO Vikram Pandit and Bair are not best friends. Bair’s book gives a deeper dive into her less than fuzzy feelings for him.
“The selection of Pandit simply reaffirmed that Citi was no longer a bread-and-butter commercial bank. It had been hijacked by an investment banking culture that made profits through high-stakes betting on the direction of the markets” as opposed to making prudent loans, she writes. She thought Citi needed a more traditional banker to fix the mess it had gotten itself into, but Pandit “wouldn’t have known how to underwrite a loan if his life depended on it.”
She writes that Citi’s board could have “done so much better than Pandit.”
She also hammers Treasury Secretary Tim Geithner repeatedly for his attempts, in Bair’s view, to shovel government money at Citi rather than subject them to harsher medicine. “Tim seemed to view his job as protecting Citigroup from me, when he should have been worried about protecting the taxpayers from Citi. … The public justifiably wanted retribution. Citi should have been led to the pillory,” she writes.
On Lloyd Blankfein
After initially being peeved at Goldman Sachs CEO Lloyd Blankfein for not bidding on failing banks, Bair describes him as helping the FDIC secure investments from other big banks – as well as ponying up his own – for faltering ShoreBank Corp. of Chicago, a 1970s-era pioneer in lending to low- and middle-income neighborhoods.
Blankfein’s help was apparently sparked by a call Bair made “in a snit” to Warren Buffett, who had earlier invested in Goldman. “I was probably out of line, but I told him I was frustrated with Goldman’s complete lack of interest in helping us capitalize failing institutions” despite the fact Goldman benefited from being able to become a bank holding company during the crisis.
Blankfein was calling with an offer to help within the hour.