Lewis Ranieri
| Lewis Ranieri | |
|---|---|
| Born | 1947 Brooklyn, New York City |
| Nationality | American |
| Occupation | Bond trader Banker |
| Employer | Ranieri Partners, Salomon Brothers |
| Known for | Securitization Mortgage-backed securities |
Lewis S. Ranieri (born in 1947) is a former bond trader and former vice chairman of Salomon Brothers and current founding partner and chairman of Ranieri Partners. He is considered the "godfather" of mortgage finance for his role in pioneering securitization and mortgage-backed securities.[1] In 2004, Ranieri was considered by BusinessWeek one of the greatest innovators of the past 75 years.[2] Currently Ranieri serves as the chairman and founding partner of Ranieri Partners Management LLC,[3] a real estate and private equity firm.
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Career [edit]
Ranieri had sought to be an Italian chef before finding that his asthma prevented him from working in smoky kitchens. A part-time job in the mail room of Salomon Brothers in 1968 then turned into a trading career, the full story of which is captured in Michael Lewis's bestseller Liar's Poker.[2][4] In the late 1970s, Ranieri joined the new mortgage-trading desk of Salomon Brothers where he contributed to creating the innovative practice of securitization, a word he is said to have coined.[2] BusinessWeek said that in 1977, with the creation of mortgage-backed securities (MBS), "Ranieri's job was to sell those bonds—at a time when only 15 states recognized MBS as legal investments. With a trader's nerve and a salesman's persuasiveness, he did much more, creating the market to trade MBS and winning Washington lobbying battles to remove legal and tax barriers."[2] Ranieri also declared that "mortgages are math," hiring PhDs who developed the collateralized mortgage obligation, repackaging mortgages into more attractive bonds.[2]
After leaving Salomon in 1987, Ranieri bought BankUnited in 1988, selling it in 2000.
After mortgage-backed securities came under major scrutiny for their role in the subprime mortgage crisis the United States housing bubble and the Financial crisis of 2007-2010, critics have taken aim at Ranieri. In March 2008, for example, Nobel Prize laureate in Economics Robert Mundell inserted Ranieri among the "Five Goats Who Contributed to the Financial Crisis" of 2008 with President Bill Clinton, former AIG head Hank Greenberg, Ben Bernanke, and Henry Paulson.[5] In March 2007, at a time when it was unknown whether the overextension of leverage inherent in subprime mortgages could lead to a financial crisis, Ranieri commented "I think [the risk] is containable. I don't think this is going to be a cataclysm." [6]
In November 2008, Franklin Bank in Houston, TX, failed after taking large real estate loan losses. The bank was founded by Ranieri, who served as the bank's chairman and took over the CEO duties in May 2008.[7]
In September 2007, Ranieri became the founding partner and chairman of Ranieri Partners,[8] and began to expand the company aggressively, acquiring firms operating across the real estate spectrum. Currently Ranieri Partners Management owns and operates Selene Investment Partners, Selene Finance, Shellpoint Partners, Hyperion Homes, Ranieri Real Estate Partners, Ranieri Real Estate Advisors, Berkeley Point Capital, and The Situs Companies.[9] Currently Ranieri maintains an active role overseeing both the day to day and long term operations of the firm.
See also [edit]
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References [edit]
- ^ The Guardian, 26 January 2009 Twenty-five people at the heart of the meltdown ...
- ^ a b c d e BusinessWeek, 29 November 2004 Lewis S. Ranieri: Your Mortgage Was His Bond
- ^ http://www.ranieripartners.com/ranieri-senior-executive-team-1/lewis-s-ranieri
- ^ New York Times, 27 January 2002, UPDATE/LEWIS RANIERI; A Mortgage Man Charts New Seas
- ^ Home Page of Norman Girvan
- ^ CNN Money: The Risk in Subprime
- ^ http://www.washingtonpost.com/wp-dyn/content/article/2008/11/07/AR2008110703599.html
- ^ http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=MSON:US&sid=as9gpgtE6Y6I
- ^ http://www.ranieripartners.com/
External links [edit]
- CNN, 9 December 2009, Lewie Ranieri wants to fix the mortgage mess
- CNBC, 11 February 2011, Lewis Ranieri Sets Record Straight
