There are plenty of tough challenges in American banking these days, but few quite as tricky as Robert Rubin's efforts to salvage his reputation. The former US Treasury Secretary has been paid more than $115 million as a senior director of Citigroup over the past nine years, during which time it has been transformed from the world's biggest bank to a basket case that has been bailed out by the US taxpayer - twice.

How can Mr Rubin, a former trading whizz at Goldman Sachs, defend his stewardship of a bank that has lost billions on collateralised debt obligations? He has two options: a) I had no idea what was going on; or b) I did know but didn't do anything about it. It's a tough choice. Which is maybe why Mr Rubin is trying a bit of both.

A year ago, he went with a), telling Fortune magazine that until last summer he “had no familiarity at all with CDOs”. But in an interview with The Wall Street Journal at the weekend he switched to b), declaring that he was involved in a decision for Citi to take more risk in 2005 because “I knew what a CDO was”. Perhaps, as his former boss Bill Clinton might have said, it depends what you mean by knew.

Anyway, let's hope for better things from three former Rubin protégés from the Clinton Administration - Tim Geithner, Larry Summers and Peter Orszag. They have the toughest challenge of all - heading Barack Obama's economic team.

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