It is a weekday, and you know what that means: more less-than-auspicious bank news. Sorry. However, most of it is coming from across the pond: Deutsche Bank looks ready to ask its shareholders for a green-light to raise EUR17 billion in capital; Royal Bank of Scotland is likely to cut roughly 7,000 jobs; and the UK’s biggest mortgage lender, HBOS, is finalizing plans to launch an $8 billion rights issue. Whew. Now for Citigroup, where market observers are increasingly asking how the bank ended up in such a fix under the guiding hand of none other than Robert E. Rubin, its executive committee chairman. To his credit, Rubin is not entirely mealy-mouthed, responding, “I’ve thought a lot about that…” Behold, a closer look at the unfolding of recent events.

Every month or so, Citigroup invites a select group of clients to dine with a singular and very special host: Robert E. Rubin, the former Treasury secretary who, for the last nine years, has been the banking giant’s self-described consigliere.

John Reed, left, and Sanford Weill, center, then the chief executives of Citigroup, welcome Robert Rubin to the Citi board in 1999. He became chairman of the executive committee, but only last year did it begin to meet frequently.

These discreet affairs are held in the executive dining room of Citigroup’s Park Avenue headquarters, but it’s a movable feast. Mr. Rubin has presided at similar soirees overseas and in the bank’s Lower Manhattan offices, where luminaries like Bill Clinton and Alan Greenspan have joined him to discuss the global economy.

“With Bill, I was a little bit like an unskilled Larry King,” Mr. Rubin says. “It’s less of a conversation with him than with Alan.”

That kind of self-deprecating observation is vintage Rubin, and it plays down his own substantial celebrity as a corporate and political wise man. When a Who’s Who of South Korean government officials, business leaders and clients gathered last September in Seoul to hear Mr. Rubin speak, they greeted him as though he were a rock star.

“There was a reception before the big event, and people just wanted to shake his hand or get a photo with him,” says Michael Schlein, who, as head of international franchise management for Citigroup, attended the meeting.

Mr. Rubin is still regarded with affection in South Korea because of the pivotal role he played in helping the country survive the Asian economic crisis a decade ago. But now, closer to home, another financial crisis is creating a very different type of notoriety for Mr. Rubin. The housing and credit mess here has cost Citigroup nearly $40 billion, forced the exit of its chief executive, Charles O. Prince III, and led to persistent rumors inside the bank that Mr. Rubin might soon be stepping down as well.

Mr. Rubin and others at Citigroup are quick to dismiss any talk of departure, but one senior insider says Mr. Rubin may soon change his job title in order to clarify a clutch of duties that have always been ambiguous. He currently serves as chairman of the executive committee; his new title hasn’t been decided.

“It’s not under consideration,” Mr. Rubin insists.

Titles aside, shareholders and analysts who have watched Citigroup run off the rails continue to ask a logical question about a financial statesman widely considered to be an astute judge of risk throughout a long and storied career: Where was Bob?

Continue reading at NYT.com

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