KEY POINTS:
Robert Rubin's career has taken him from Wall Street wizard to the pinnacle of power in Washington and back.
He may have his hands full as he tries to demonstrate his wizardry one more time.
Rubin was named chairman of Citigroup following the resignation yesterday of Charles Prince as chairman and chief executive of the largest US bank by assets.
Sir Win Bischoff, who runs Citigroup's Europe operations, was named acting chief executive.
The change thrusts the 69-year-old Rubin into a bigger role at Citigroup, as it struggles with investor discontent over its business plan, a perceived shortage of top management talent and a potential US$11 billion ($14.4 billion) write-down for subprime mortgages.
Since joining Citigroup in 1999, Rubin has focused mainly on strategy, assuming an "eminence grise" role as a close adviser to Prince, while leaving day-to-day business operations to others. Last month, he said he would bet Prince would still be chief executive in 2012 and beyond.
"The board is extremely supportive of Chuck's strategy," Rubin said.
"The strategic track is exactly as it ought to be."
And yet, despite his senior role and support of Prince, Rubin has largely preserved the exalted reputation he built from years of fixing global economic crises during the Clinton administration, and prior to that as co-chairman of Goldman Sachs.
"Rubin is a pretty sharp guy. I've met him personally and I was impressed," said Jim Huguet, a money manager at Great Companies in Florida. "He's very intelligent, and obviously has a lot of experience."
Rubin may be best known as US Treasury Secretary between 1995 and 1999.
He was the brains behind several multibillion dollar packages to bail out ailing emerging market economies, including in the Asian financial crisis of 1997.
Within the nation's capital, Rubin was perhaps second only to his friend Alan Greenspan, then head of the Federal Reserve, in commanding the ears of politicians and executives on economic policy and financial markets.
Lauded for his 26 years at Goldman Sachs, including a stint running its stock trading business, Rubin won respect in Washington for his coolness under pressure; the no-nonsense operator who got things done. His wry humour didn't hurt.
Such qualities served him well when he handled an economic crisis in Mexico by tapping a little-known fund at US Treasury to provide US$20 billion of emergency help.
He later won plaudits for helping engineer a drastic recovery in the US dollar against the Japanese yen.
Criticised for missing the boat when Treasury declined to help an international bailout of Thailand, the first country felled by the 1997 financial crisis, Rubin quickly claimed centre stage in later bailouts for Indonesia and South Korea.
Rubin was known as a moderate Democrat with fervent beliefs in free markets and the need for US leadership in the global economy. He was also a vocal supporter of tackling America's social ills, especially in its inner cities.
And yet, even after becoming Treasury secretary, Rubin never really felt at home in Washington. Instead of settling down, Rubin kept a suite at a luxury hotel downtown and shuttled to New York most weekends to spend time with his wife Judith, who refused to give up their Manhattan apartment.
Rubin joined Citigroup just after the Clinton administration and Congress agreed to abandon a Great Depression-era rule, known as Glass-Steagall, designed to keep banks, securities firms and insurance companies separate.
He joined a three-person Office of the Chairman with Sanford "Sandy" Weill, who had lobbied to end such rules, and John Reed. The latter would retire from Citigroup in 2000. Prince then took over from Weill in 2003.
Rubin would become well-paid, last year getting US$29.4 million from compensation and stock awards.
- Reuters
