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Mar 05

Citi continues to make nice

Posted by MQuinn in complianceCitigroupbailout


I wrote about it before, but it's worth mentioning again: Nobody plays nicer with the government than Citigroup.

While American International Group is just starting to fully appreciate all the nice things the US taxpayer has done for it, Citi, which is 27 percent owned by Uncle Sam, has always gotten it.

In testimony before a bailout oversight panel on Thursday, the bank's CEO, Vikram Pandit, voiced support for Obama administration financial reform goals, including a consumer protection authority and even said banks generally should not engage in trading for their own profit, Reuters reported.

And though he didn't come out with a full endorsement of the Volcker Rule, Pandit and Citi have largely acted as if it's already in place, unloading its highly profitable energy trading unit Phibro. The bank has even been in talks about selling its hedge fund business.

In a "pot-meet-kettle" moment, Paul Atkins, a former member of the Securities and Exchange Commission appointed by former President George W. Bush, said it appeared that Citi was becoming "politicized".

"It's difficult to avoid the impression that one of the motivations is to curry favor with the hand that feeds it."

But I say, that's exactly the point. Banks haven't exactly been gracious about receiving bailout funds, access to capital at essentially zero percent interest or the many government programs that have propped up the financial system over the past year and a half and returned many of them to profitability.

Instead we've heard bankers insist they didn't need a bailout in the first place and that essentially no reforms are needed whatsoever.

It's a bit refreshing to hear something akin to gratitude.

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