This was reported earlier in the week, but we think it’s worth hitting on again, just to drive home the point about how dysfunctional Citigroup (C) is right now, and why it needs to be chopped up into tiny, harmless bits…
Citigroup is still processing no-doc, no appraisal loans. No, the company says it’s a “glitch” or bureacratic error or somesuch nonsense, and they’re suspending certain activities until its fixed, but when we’re talking about an institution with a multi-trillion dollar balance sheet, we shouldn’t have to risk glitches that coujld potentially leave more gaping holes on their balance sheet.
At a smaller institution, fine, it’s no big deal. At a bank the size of Citi’s, that remains too big to fail (in the eyes of our regulators — many of you might not agree), this is unacceptable at this stage in the game.
Our guess is that top management has spent so much time over the last 18 months thinking about capital levels and ways to survive the crisis, that very little effort has been put into actually fixing what’s wrong with the bank.
Meanwhile, the loveliness continues at Citibank Japan, where it’s been ordered to halt all retail sales operations for one month due to weak anti-money laundering measures. Who knows where else they’re deficient. It’s time for a broken up Citi, with smaller management. Clearly the bank is too big to fix.