Before, it was Bear Sterns.
Then the Lehman Brothers.
Is Citibank the next big, global bank to fail?
Yes, according to some financial experts interviewed by the UK newspaper The Daily Mail. According to analysts, the company may not have enough cash to withstand subprime mortgage losses that could amount to £13.3 billion.
This uncertainty about the company’s future caused Citigroup’s shares to plummet 20% when trading opened on Wall Street last Friday, November 21.
The stock closed at $3.77 — a huge drop from its 52-week high of $34.77 .
Of course, many people still believe that the US government will not allow a big bank such as Citigroup to collapse. In a Bloomberg interview, a former US Treasury Department general counsel said that “[t]here is no question that Citigroup will not be allowed to fail.”
For these people, the “Big Bank” theory will prevail, as in the case of the bailout of AIG.
As a cost-cutting measure, Citigroup CEO Vikram Pandit said the company will cut around 52,000 jobs next year.
But will that be enough to save the world’s largest bank?
Whatever the case is, Citibank account holders in the Philippines are concerned. They ask: if Citigroup goes bankrupt, what will happen to Citibank Philippines? Is there a reason now to jump ship?
10 thoughts on “Is Citibank the next big bank to collapse?”
This is alarming! Especially since this is coupled with the issue of General Motors on the verge of declaring bankruptcy. And we all know that if a large company such as Citigroup and General Motors failed, then there’s a domino effect to smaller businesses which in turn will have a detrimental effect to the economy as a whole.
time to get all your money/investment out of citibank group?
Speaking of AIG, what happend to the imminent Philamlife sale? Suddenly there was no more news about it.
How about the borrowers like credit card holders? Will their debt be all gone too?
This is very disturbing. If Citibank collapses, then it’s inevitable for others to follow. We haven’t yet seen the bottom of the crisis, have we?
I think AIG is still for sale that’s why no news yet. Probably the reason why Citibank is having problems is because they got a big part of the subprime losses that affected AIG. I just hope and pray that Philippines and its companies will withstand all of this turmoil.
I just want to reiterate what filipino entrepreneur have said above:
“How about the borrowers like credit card holders? Will their debt be all gone too?”
This economic recession will become a full-blown economic depression.
I heard that the worst is yet to come, since it taking some time for the asian economies to feel the pinch. I remember when I was in college in the U.S, it was so easy to get a credit card once you stayed there for a year. same as Japan too. Not they are like ultra strict and very hard to get. The Philippines has always been strict in this regard which is good. However the country is too dependent on other countries economies(globalization in general), the nation probably needs to beef up our banking institutions and economic muscle. easier said that done. thankfully for the OFWs for helping the nation, but we can’t depend on it alone either.
My father-in-law used to work for Citibank back in the 80s. Before he retired, the company gave him shares. But there was a merger, so the company is called Citigroup now, right? How can he get or sell his shares? Does he have to go to New York? Or should he just contact a broker?
fantastic post, very informative. I wonder why the opposite experts of the sector do not understand this. You must proceed your writing. I’m confident, you’ve a huge readers’ base already!