ShitiBank Appears To Have No Exit Strategy
Citigroup Inc. (NYSE:C) apparently doesn’t have an exit strategy to pay back the $45 billion in Troubled Asset Relief Program (TARP) funds the government gave it. Is this really a shocker?
Earlier this week, Bank of America Corp. (NYSE:BAC) and Wells Fargo & Co. (NYSE:WFC) both discussed ways to eventually pay back their bailout money. However, Citi has been pretty much mum on the subject, aside from having its shareholders approve the final arrangements giving U.S. taxpayers a 33.6% stake in the company
Now, Elizabeth Warren, chairwoman of the Congressional Oversight Panel for the TARP, is concerned that the silence is because Citi doesn’t have a plan. Warren told the New York Post that regulators don’t have any insight into how Citi’s management team plans on paying back its bailout loans.”Too big to fail and not strong enough to succeed is obviously no exit strategy at all,” Warren told the Post.
No wonder federal regulators forced the bank to hire outside consultant Egon Zehnder International to evaluate whether the current management team is cut out to lead the bank out the crisis. Like most investors, the government needs a bit of reassurance its investment is going to succeed.
Let’s hope CEO Vikarm Pandit’s right hand man, Lewis B. Kaden — the most famous banker you’ve never heard of and Citi’s vice chairman in charge of human resources, government affairs, and philanthropy — has some words of wisdom that will allow Pandit to keep his job. – Maria Woehr