Globonomics!

Consulting|Technology|International business

Can large banks fail / CITIBANK on the brink

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I saw the developments of the last week where CITI (NYSE: C) shares really fell to $3 a share and was in danger of going bust as public confidence was eroding sharply. CITI faces a real threat of a collapse.

There were two options open to the board: 1. Fire the CEO, Vikram Pandit as a sacrificial lamb, 2. split the company and sell the parts or whole of the company.

This is a bank that has been doing business in over 109 countries for the last 200 years. The legacy of CITIBANK is just too great to allow one of the largest banks in the world to fail.

It was once the largest bank in the world.

I saw a presentation by Vikram Pandit to the Finance students of University of Pennsylvania (UPENN), Wharton where he addressed the credit crises. Its over 30 minutes long and makes for interesting hearing from the now beleagured CEO. A practical presentation that there are no shortcuts in this path to recovery and he told them it was the best time for them to go back to school!

The link to the presentation is here: http://in.youtube.com/watch?v=98oR4iYYAsM

Of course, he made his millions (almost $160 million from the sale proceeds of his Hedge fund, Old Lane LP which CITI purchased for $800 million) and another few hundred million from his 1st year at the helm of CITI.

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