Robert K. Steel

Robert King Steel is the President and CEO of Wachovia Corporation. He received his undergraduate degree from Duke University and his Master of Business Administration degree from the University of Chicago.cite web | title="U.S. Treasury - Biography of Robert Steel, Under Secretary for Domestic Finance" | url=http://www.treas.gov/organization/bios/steel-e.html | accessdate= September 25 | accessyear= 2007 ]

Personal life

Born August 3, 1951, Steel grew up in Durham, North Carolina, a short walk from Duke University, his future college. Robert is the second of three boys. He was a Boy Scout, attaining the rank of Eagle Scout.

Steel has houses in Greenwich, Connecticut, Georgetown, Washington D.C., and Aspen, Colorado. He is married to Gillian Steel and has three children.

Career

Robert Steel had joined Goldman Sachs in 1976 and served in the Chicago office until his transfer to London in 1986. In London, he founded the Equity Capital Markets group for Europe and was extensively involved in privatization and capital raising efforts for European corporations and governments. He later assumed the position of head of Equities for Europe. In 1994 he relocated to New York and served as head of the Equities Division from 1998 to 2001, until his appointment as a vice chairman of the firm. In 1988 he became a partner and joined the Management Committee in 1999. Upon his retirement from Goldman Sachs on February 1, 2004, he assumed the position of advisory director for the firm and then senior director in December 2004.

Upon his retirement, Steel became a senior fellow at the John F. Kennedy School of Government at Harvard University, serving from February 2004 to September 2006. Then, in 2006, Steel was appointed Under Secretary for Domestic Finance within the United States Department of the Treasury. He served in this position from October 10, 2006 - July 9, 2008

On Wednesday July 9, 2008, Robert Steel resigned as Undersecretary and was named President and CEO of Wachovia. [ [http://www.newsobserver.com/business/story/1137400.html New CEO admits problems at Wachovia] ]

Steel has served on the Duke University Board of Trustees since 1996. In 2005, he became the chairman of Board of Trustees. [cite web | title="Steel's challenge:: Save Wachovia" | url=http://www.charlotte.com/123/story/710880.html | publisher=Charlotte Oberver | accessdate= June 13 | accessyear= 2008 ] [cite web | title="The Trustees of Duke University" | url=http://www.duke.edu/web/ous/trusteesgood.htm | publisher=Duke University | accessdate= April 16 | accessyear= 2008 ]

Credit crisis

Under Secretary Robert Steel presided over turmoil in credit and mortgage markets. He warned in early September 2007 that the process was "far from over." He said, "Policy makers must remain vigilant as further stress could create further challenges and continued volatility." [cite news|author=Reuters|title=Credit market turmoil 'far from over', says US treasury|publisher="Stuff.co.nz"|date=September 6, 2007|url=http://www.stuff.co.nz/stuff/4192059a6026.html] He joined Under Secretary for International Affairs David McCormick in calling for the Group of Seven's financial stability watchdog to produce a detailed report on the root causes of current market problems for the October meeting of G7 finance ministers in Washington. [cite news|first=Glenn|last=Somerville|title=UPDATE 2-U.S. Treasury-Need measured response to credit woes|publisher="Reuters"|date=September 13, 2007|url=http://www.reuters.com/article/bondsNews/idUSN1339343220070913]

However, on September 6, 2007, he stated on CNBC Television he was optimistic that money markets would be operating normally by year-end as a liquidity crunch eases and confidence in the market returns. He said that it would still take time and encouragement for banks to become more comfortable in taking lending risks. [cite news|title=US Treasury's Steel sees money markets settling|publisher="Reuters"|date=September 6, 2007|url=http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-06T220501Z_01_WBT007515_RTRIDST_0_USA-TREASURY-STEEL-URGENT.XML] He appeared before the United States House Committee on Financial Services to discuss the issue. [cite news|first=David|last=Lawder|title=Mortgage servicers urged to head off foreclosures|publisher="Monstersandcritics.com"|date=September 4, 2007|url=http://news.monstersandcritics.com/usa/news/article_1351740.php/Mortgage_servicers_urged_to_head_off_foreclosures]

During that hearing, he said, [cite web | title="hearing090507.wvx" | url=http://financialserv.edgeboss.net/wmedia/financialserv/hearing090507.wvx | accessdate= September 26 | accessyear= 2007 ] quote|"As interest rates began to rise in 2004, mortgage origination fell to just under $3 trillion. With this decline, there was significant overcapacity in the mortgage industry. To satisfy continued investor demand for mortgage-backed securities in their excess capacity, some mortgage originators relaxed their underwriting standards, lending to individuals with a lower standard of documentation, and thereby selling mortgage products, which for some borrowers would become unaffordable. The combination of rising interest rates and mortgages resetting in higher rates and a decline in house price appreciation led to rising delinquencies and defaults among sub-prime borrowers. ... The uncertainty regarding the future prospects of these mortgage-backed securities compelled investors to reassess the risk of these securities, and subsequently, reassess price."

In early 2008, Steel was asked by Treasury Secretary Henry Paulson to convince Freddie and Fannie to raise additional funding. However, he did not require binding commitments; ultimately, Fannie secured $7.4 billion, but Freddie did not raise any more money. [cite news
url=http://www.nytimes.com/2008/10/05/business/05fannie.html?pagewanted=3&th&emc=th
title=Pressured to Take More Risk, Fannie Hit a Tipping Point
publisher=The New York Times
date=2008-10-05
accessdate=2008-10-05]

References