Fed's 2013 Stress Test Scenarios Create Citigroup Headache

This year has just been one headache after another for Citigroup, and the Federal Reserve has made it more likely that Citi kicks off 2013 with a migraine, too.

The Fed on Thursday announced the rules for the next season of its low-rated reality show, Stress-Test Survivor. The rules introduced a new wrinkle for 2013: Banks have to prove that they've got the capital to handle a nasty economic downturn in Asia.

And you'll never guess who has massive exposure to Asia! OK, actually, you guessed it: That's right, it's Citigroup. Bloomberg points out that Citi, under ousted CEO Vikram Pandit, expanded willy-nilly into Asia in over the years and employs thousands of people there. At last check, the bank had $356 billion in consumer-banking and trading assets in Asia, by Bloomberg's count.

The news pushed Citi's stock price down 2.5 percent on Friday, far worse than its peers such as JPMorgan Chase, which were down less than one percent.

Citi, you may recall, kicked off 2012 as one of just a few banks to fail the Fed's 2012 stress tests, even without the massive-Asian-downturn scenario. That meant the bank wasn't allowed to buy back stock or give money to shareholders without first raising more capital.

The stress-test failure was the source of more misery for Citigroup the rest of the year, probably contributing to shareholders rejecting Pandit's pay package in a stunning bit of activism, and ultimately leading to Pandit's messy defenestration a month ago.

New CEO Michael Corbat has less than eight weeks to get Citi's house in order before January 7, when banks are required to submit their new capital plans to the Fed for stress-testing. That will be its own sort of stress test.