When will the Feds do the right thing and break up Citi (C)?
The bank, by virtue of its size, internal chaos, and a management which still bizarrely thinks that the bank needs to grow, remains a significant source of systemic financial risk. The mission of current management and the bank's regulators should be to go full speed ahead on dismantling it.
This is the bank, remember, that up until recently was still doing no-doc loans, because it couldn't get its paperwork in order.
In the meantime, the bank apparently has to deal with the shame of needing an outside consultant come in and tell it how its executives are doing:
FT: People close to the situation said Citi had retained Egon Zehnder, a headhunter and board advisory consultancy, to carry out an in-depth management review requested by the government after stress tests on banks in May.
The push for Citi to enlist external help, led by the Federal Deposit Insurance Corporation and backed by other regulators, underlines authorities’ desire to keep Citi’s upper echelons on a tight leash after rescuing the bank with $45bn. It also raises questions about the long-term future of Vikram Pandit, Citi’s chief executive who is under fire from the FDIC, and other senior executives.
Meanwhile, Felix Salmon points out that the bank's chairman and professional board-sitter Dick Parsons only has $350k in Citi stock, which is a pittance. At these prices, it's an option for him -- they'll either go up a lot, or down a little. He should either get out of the way, or reallyg et some skin in the game.
Share: Buzz Facebook Twitter Digg Reddit StumbleUpon Sponsored Link: See Also: Stop Prodding Citi To Lend More Money (C) Obama Pays Citigroup A Visit Citigroup: Still Doing No-Doc Loans (C) Joe Weisenthal is Editor of Clusterstock. Contact him by e-mail: var dw = function(s) { document.write(s); };dw('jw');dw('eise');dw('ntha');dw('l@al');dw('leyi');dw('nsid');dw('er.c');dw('om');use contact page AIM: openfilerook Work Phone: 646-214-8948 SMS: 917-621-7438 Subscribe to his twitter feed Recent Posts THE BUGLE HOLDS Buffett: We Screwed Up Does Sheila Bair Have Too Ma... 2 Comments I'm afraid of no ghost said: Aug 13, 7:56 AM This is an inspired decision, bringing in the guy from Ghostbusters. Who else has more experience saving New York from giant, stumbling, stupid, destructive monsters? And if they get Bill Murray on the board I will sell everything I own including my clothes an put the money in a Citi checking account. Dizzy said: Aug 13, 9:28 AM Egon from Ghostbusters... LOL. Nice one! So what does Citi's management get in case of bad report cards? And what kind of "grades" gets entered here? "Does not play well with others"? "Runs with scissors"? "Cannot be potty-trained"? Join the discussion Name (Required) Email Address (Required but never displayed) URL Comments (You may use HTML tags for style) var dc_AdLinkColor = '#1D637D' ; var dc_PublisherID = 107754 ; Newsletter newsEmailText(); Silicon Alley Insider Select see sample Silicon Alley Insider Chart Of The Day see sample Clusterstock Chart Of The Day see sample Clusterstock Daily Precap see sample $(function() { $('#newsletter-expand a').lightBox(); // Select all links in object with gallery ID }); Got a tip? Let us know! Markets Advertisement Cars, Cars, Cars– The Top 10 Markets For Green Cars
– Ford Is Cranking Up Production
– Everything You Wanted To Know About The Fisker Karma
$("#editorial a").mousedown(function() { $.post("/ws/heatmap", { homepage: 'editorial', uri: $(this).attr("href") } ); } ); Read Me Read Full Article »