Citibank Says It Has Changed for the Better
March 15, 2010
It's been trendy for a couple years now to use Citibank as the whipping boy for the ills and misdeeds of the U.S. banking system. And certainly there is some validity to the criticisms: Citibank pioneered the approach of mixing risky trading moneys with supposedly safe deposit accounts such as CDs, money market accounts, and savings accounts.
In other words, Citibank was gambling with your savings account. As it turned out, that strategy proved problematic.
But what's going on with Citibank now? That's a question that anyone who cares about the safety and liquidity of their investments should consider.
Citibank CEO Vikram Pandit appeared before Congress this week to address such matters.
Image Is Everything?
In a Gallup poll last year, only 19 percent of Americans surveyed said bankers had integrity. In 2005, 41 percent said that bankers had integrity.
Therefore, a big part of what Mr. Pandit said to Congress was dedicated to repairing the image of Citibank in the eyes of the American public. For example, Mr. Pandit pointed out the work that Citibank is doing to help American companies penetrate global markets through exports, which creates jobs here at home.
Mr. Pandit added: "Citi owes a large debt of gratitude to American taxpayers."
So, Does This Mean That Your Savings Are Safe at Citibank?
Beyond image concerns, Citibank--and indeed the whole banking system--needs to get back to a point where it can legitimately assure conservative investors that the money being put into CDs and other investment accounts is not being poured directly into casino-like trading rooms.
Mr. Pandit and other bank CEOs still have work to do on that score.
