goldis4ever

The End of Citigroup

Actually, the consumer division of Citigroup was a money generator for the bank. It's the corporate division, with credit derivatives as its starring instrument, that burning citibank. Just a few years, some mid-level managers had warned that the bank was too exposed in credit derivatives and strongly advised reducing its exposure quickly. But derivatives was making too much money for the bank and ignored the warnings. What's more, they let go those very same managers who sounded those warnings. I guess there must be a certain measure of satisfaction from those employees who had finally proven they were right.

On Jan 13 01:02 PM Teutonic Knight wrote:

> On top of every commenter had said so far, C fell prey to a fast
> changing banking landscape on three fronts that renders its business
> model outdated -- 1) Technological advances; 2) Regulatory paradigm;
> and 3) Customer needs.
>
> First, with the general depositor being increasingly equipped with
> PC, laptops, smart phones, and the accelerated availability of affordable
> high-speed internet, both wired and wireless, online and mobile banking
> explodes.
>
> Second, on top of the first, the public becomes more informed and
> sophisticated in investing through web. They go online for the best
> deals in CD, money market funds, savings accounts, etc., and brokerage
> as well.
>
> Third, adding fuel to the fire, recent banking regulations opened
> the doors for a myriad of companies to become banks, such as GMAC,
> American Express, and even AIG to name a few. Competitions for scarce
> deposits fiercely intensify.
>
> The reader could deduce for himself/herself that the need for a one-stop
> one-size fits all shop had practically vanished.