In the News: Quote FDIC – Citi, It’s Time for a Change
The FDIC, under Sheila Bair, is both pushing for a shake-up of Citigroup’s top management and pressing a fellow regulator to lower the government’s confidential ranking of Citi’s health. Shaking up Citi’s top management should definitely be causing a little bit of worry in the mind of Mr. Pandit, and lowering Citi’s health ranking would let regulators control the firm more tightly – as if Citi wasn’t already a government-run bank.
The FDIC, however, is not leading a united team of regulators, but rather, clashing with several regulators who do not feel that either of these moves is wise or in the best interest of the economy. Furthermore, several regulators believe that Ms. Bair has overstepped her boundaries and the boundaries of the FDIC. Considering the FDIC is helping to finance a $300 billion loss sharing agreement with Citi and is backing $40 billion worth of Citi paper, it is hard to justify the notion that the FDIC shouldn’t have a large say over just what Citi is doing and just who is managing the faltering giant.
