FDIC Pushes Citigroup To Change Management: WSJ

NEW YORK — The Federal Deposit Insurance Corp. is reportedly pressing for a management shake-up at embattled bank Citigroup Inc., putting CEO Vikram Pandit in the hot seat.

The Wall Street Journal cited people familiar with the matter for its report on Friday.

"We are confident in our management and confident that we will continue to position Citi for a return to sustained profitability," Chairman Richard Parsons said in a statement e-mailed to The Associated Press.

A spokesman for the FDIC declined to comment.

Citigroup shares slipped a penny to $3.56 in morning trading Friday.

Citigroup has been one of the most troubled banks throughout the financial crisis. Investors have long criticized its board and management for allowing the bank to make big investments in the risky housing market _ actions that led to Citigroup reporting billions in losses.

Citigroup has already received $45 billion in government rescue funds, and a portion of that will soon be converted into common shares, making the Treasury Department its largest shareholder.

Last month, the government determined that it would need to raise an additional $5.5 billion as a buffer against future losses.

"We went through a rigorous stress test process, the results of which were agreed to by appropriate regulatory agencies and clearly reflect the significant progress made by this management team over the last 15 months to turn Citi around," Parsons said in Friday's statement.

Comments

[iridium53]

09:29 PM on 06/07/2009

Where are Schapiro and that not very courageous Holder?

Investigations?
Grand juries?
Indictments?
Arrests?
Convictions?

None.

[munki]

07:52 PM on 06/10/2009

just get it done!

We need to see fresh corporate attitude!~

[PhilipTaylor]

02:42 PM on 06/06/2009

While by far NOT the worst of the Wall Street 8 he did L 1 E to Congress and his balance sheet, including the hidden stuff, is a disaster.

So he seems like a good start to cleaning up the massive and offensive Culture!

At least it will say you have to tell Congress the TRUTH or pay a price!

[Carolab]

10:54 PM on 06/06/2009

Government Taps Bailout Contractors With Conflicts of Interest

Firms With Ties to Banks Can Work Both Sides of Rescue

http://washingtonindependent.com/44659/fed-taps-bailout-contractors-with-conflicts-of-interests

[CentralVA]

08:12 AM on 06/06/2009

No CEO has succeeded in managing Citigroup. Not Chuck Prince. Not Vikram Pandit. It is too big and unwieldy to work.

[munki]

11:29 AM on 06/06/2009

Because NO ONE person genius enough to handle diverse industries under Citigroup...

[billw8017]

10:33 PM on 06/06/2009

Like Topsy, it just grew? No, its growth was partially planned and partially imposed in a governmental quest for the cheapest solution. Some of the "growth" was bought with sub prime loans, securitized mortgages, foreign government investments and derivatives, a illusion of hope rather than anything real.

If the current management cannot cope, the government could hardly do worse. Theoretically, these banks "too big to fail" should be split asunder, stocks in profitable and unprofitable fractions equitably distributed so shareholders can take their bath and emerge with good expectations for the shares in a vital part of the economy that is not at the verge of total bankruptcy.

Sheila Bair and the FDIC is the one federal institution that has been doing its job as the Treasury and the Federal Reserve rode the emerging storm with feeble palliatives.

[billw8017]

10:42 PM on 06/06/2009

...make that, "hysterical palliatives."

[DiogenesOfAlaska]

04:54 AM on 06/07/2009

I agree with much of what you say about the evolution of the problem, but I doubt very strongly that the dysfunction has anything to do with personal qualifications, and in fact not even with party affiliations.

It's a prime example of how complexity overwhelms: people, institutions, markets, everything.

Lesson: don't fall for the illusion of control. And if you can't handle it, drop it.

[Kungfublood]

09:27 PM on 06/05/2009

What the FDIC wants is a management change at Citigroup
What the public wants is an increase in population of Federal prisons.

[youngharry]

10:09 PM on 06/05/2009

Fire all the heads of Citi Group and break them up. They are nothing more than a bunch of White Collar Criminals. They have stolen billions from the American people.

FIRE GEITHNER & SUMMERS TOO.

[brandnewstuff]

07:35 PM on 06/05/2009

On the chopping block- good- next

[DiogenesOfAlaska]

07:14 PM on 06/05/2009

No, you can't do that to Pandit. He needs that dollar that he's making this year as a salary. How can you be so cruel? Have you got no heart?

[Baltotoast]

06:14 PM on 06/05/2009

Time to acknowledge that Sheila Bair is a rogue regulator. She is clearly interested in expanding her empire at the expense of all else. She has a personal vendetta against Pandit, who only became CEO in December of 2007, and Citibank and is out to break them both.

Can someone please remember that the government is a minority shareholder - if you have a beef, the legal process is to elect a new board of directors, whose responsibility it is to hire and fire the CEO.

This is getting absurd.

[DiogenesOfAlaska]

07:22 PM on 06/05/2009

Excuse me, but your indignation wouldn't even pass in a supporting role in the High school play. And in case you believe what you are saying, you may want to look up the meaning of the word 'disassociative'.

This is a once in a century situation and you are coming up with psychobabble about personal motivations of the head of the FDIC? Get real before you get lost in your simplistic worldview.

[Baltotoast]

05:50 PM on 06/06/2009

PIck up a newspaper and get educated. It is common knowledge that Pandit and Bair have had a hissy fit since this Fall. And you only have to read todays papers to understand that Bair is bent on empire expansion.

Multi syllable words are not a shield from ignorance.

[billw8017]

10:41 PM on 06/06/2009

A lesson JP Morgan taught an earlier generation of Americans is that you can control a company with less than a third of its stock. And, he took over the stock at market prices, often prices he had manipulated to cheapen it! It is too bad Timothy Geithner and Lawrence Summers are not JP Morgan or much like him but more like hirlings of Wall Street.

[DiogenesOfAlaska]

04:03 AM on 06/07/2009

Yeah. JP Morgan of course wasn't a hireling of Wall Street. Much better.

Funny joke.

[KCFreedom]

05:42 PM on 06/05/2009

It's WIN-WIN!

He makes tens, maybe hundreds of millions if he stays, or if he is booted out. Better yet, the taxpayers get to foot the bill!

How do I get a job like that?

[fairplaystacy]

04:36 PM on 06/05/2009

illegalindianlabor.host56.com

[jalowe1957]

03:25 PM on 06/05/2009

Better yet, how about throwing blankets over all the Citibank branches and its corporate headquarters and start fumigating?

[KCFreedom]

05:43 PM on 06/05/2009

Cockroaches that wealthy probably have an escape tunnel.

[fcsakes]

07:47 PM on 06/05/2009

It's really, really hard to kill a cockroach. They have to be encased in plastic for something like a hundred years before they even stop breathing.