Tuesday, March 04, 2008

wait a minute, to "save" them?

I knew the banks had gotten themselves into some trouble, but unless the reporter used sloppy wording, I had no idea it was this bad. From Marketwatch:
Mideast sovereign wealth funds may fail to save troubled U.S. banking giant Citigroup Inc. unless more cash is pumped into the lender, the head of a $13 billion Dubai-owned investment firm said Tuesday.
Sameer Al Ansari, Chief Executive of Dubai International Capital told delegates at a private equity conference that it will take more than the combined efforts of the Abu Dhabi Investment Authority, the Kuwait Investment Authority and Saudi investor Prince Alwaleed bin Talal to save the bank.
"It's going to take more than that to rescue Citi," Ansari said. He added that more write downs are expected and that Gulf investors would be required to bolster Citi.

This sounds like Citigroup is in very real danger not only of losing more profit or downsizing or layoffs, but actually of closing. Citigroup, by the way, is the largest firm in the world, with assets over $2.4 trillion. The ramifications of any major bank closing, with its echoes of 1932, would be enormous; Citigroup's demise would be something truly ominous. For those of you interested, Accrued Interest has a nice article dealing with the question of whether Citigroup is too big for the government to allow it to fail.

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