Elizabeth Warren, the Harvard law prof and official TARP watchdog, will call on top execs at Citigroup (C) and AIG (AIG) to get sacked, the Guardian reports.
She also wants to see shareholders wiped out completely, though it’s not clear whether this medieval-style justice on the banks would apply to creditors as well. And, frankly, that’s the big question since shareholders in these banks have, for all intents and purposes, been wiped out.
Without stern punishment for the banks and their executives, Warren warns that we’re heading for a Japan-like scenario.
There are some positive signs, such as the fact that Geithner is now talking about canning bad CEOs. On the other hand, it’s also true that the folks in charge at Citi and AIG weren’t the ones who made this mess.
But unfortunately, for this to work, we need to show some punishment, and as it looks now, it appears that the people who made this mess largely walked into the sunset with $100 million dollar retirement packages. So, the brass currently serving may need to go, perhaps if only for the symbolism.