Friday, January 16, 2009

Tough Times in the Citi

When Wells Fargo & Co. Chairman Dick Kovacevich spoke at The Club October 21, he gave a detailed history of the drive to deregulate banking in the United States and open up new lines of business for banks. (See video above of Kovacevich's speech, or listen to audio.) Kovacevich's history drew heavily on his many years of work as an executive at Citibank, as it grew to global giant status and led the way in the deregulation fight.

Now, is that fight over? News this week is that Citi is dividing itself up, sequestering its "bad bank" businesses from its "good bank" businesses so that the bad doesn't drag down the entire business. And the Congressional financial overlords are talking of tightening regulation of banks -- something that will be easier, now that many banks are taking taxpayer money in one form or another. (There's no free lunch, even for the pinstripes.)

We should get at least a glimpse of the answer on Tuesday, when Barack Obama gives his inaugural speech in Washington, D.C.


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