We're Not Assessing Risk--Let's Call It What It Is--We're Assessing Greed
Citigroup and Prince: Too-Risky Business
By Steven Pearlstein Wednesday, November 7, 2007; D01
. . . What Prince never quite realized, however, was that Citigroup's problem wasn't that its people didn't know right from wrong.
No, the bigger and more encompassing problem was that the company and its top executives were never very good at assessing risk -- whether of cutting ethical corners and getting caught, or that certain kinds of loans would go bad, or that the market might turn this way or that.
This knack for misgauging risk dates at least to the 1980s, when the old Citibank got in trouble with its excessive lending in Latin America. It was true in the late '80s and early '90s when the bank got in too deep with commercial real estate lending and had to be rescued by a Saudi prince. It was true during the tech and telecom bubbl…