Comments on: Vikram Pandit’s deceptive reporting A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: GeorgeLekatis Tue, 01 Mar 2011 12:38:15 +0000 We must not blame Citigroup only. What is described in the article is the failure of the Basel II framework, not Citigroup. Fortunately, Basel III is way better, although we cannot expect that it will solve all the problems.

The article covers what happened in February 2008. In July 2009 we had the enhancements to the Basel II framework that try to mitigate these risks.

According to the Basel Committee:

“The supplemental Pillar 2 (supervisory review process) guidance addresses several notable weaknesses that have been revealed in banks’ risk management processes during the financial turmoil that began in 2007.

The areas addressed include:

– Firm-wide governance and risk management;
– Capturing the risk of off-balance sheet exposures and securitisation activities;
– Managing risk concentrations;
– Providing incentives for banks to better manage risk and returns over the long term; and
– Sound compensation practices.

The Pillar 3 (market discipline) requirements have been strengthened in several key areas, including:

– Securitization exposures in the trading book;
– Sponsorship of off-balance sheet vehicles;
– Resecuritization exposures; and
– Pipeline and warehousing risks with regard to securitization” exposures

George Lekatis

By: hsvkitty Thu, 24 Feb 2011 22:03:33 +0000 Right on, ErnieD. If no one steps up to make the robber barons accountable for their actions, it’s going to keep on happening… and only get worse.

By: ErnieD Thu, 24 Feb 2011 20:36:38 +0000 Unfortunately, the SEC and other regulators may have made themselves irrelevant on these types of issues. The real action may need to be a lawsuit from investors who lost money when Citicorp tanked big time after Pandit and Citi’s auditors announced that internal controls were just fine.