Is CitiBank Ready for a Collapse?

January 10th, 2008 • Related • Filed Under

Is CitiBank Ready for a Collapse?Think a company as large as Citigroup (NYSE C) can’t fail? Only a few months ago, one of the largest online banks, NetBank, closed its doors, leaving billions of dollars in account holder funds in question. Fortunately, the FDIC stepped in and made arrangements for ING to pick up the pieces but what if it happens with over $1 Trillion in assets?
 
So here’s the gist of the story:
 
CitiGroup has just gone international asking for the assistance of foreign capital.
 
Rumor has it that Citi has privately asked the Federal Reserve for an emergency rate reduction across the board. While several banks are seeking this, with the backend channels and political clout that Citi carries, it just may happen.
 
CitiBank has just locked out millions of ATM cardholders from ATM withdrawals. While the company’s spokesperson has denied such claims, the fact is that cardmembers in major cities have been capped on their day to day withdrawals. Citi claims this was caused by a “recent” increase in ATM PIN based fraud.

Rumor has it that mortgage related losses to be reported next week could be much higher than expexected only a few weeks ago.
 
Only yesterday, we announced that First Data and Citi moved to hold funds from several legitimate merchants around the country. The company’s official response has been that the move has been its policy all along.
 
Unless the Federal government steps in, this could be the largest bank closure in history. My only question is: Will the Feds be able to pick up the pieces on this one?

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There Are 5 Responses So Far. »

  1. Comment by Eleven12 on 11 January 2008:

    Big companies have big risks of closing doors, as they deal with multi millionaire/billionaire transactions, I hope that doesn’t happen to citibank, I think they’re great

  2. Comment by Yoka on 11 January 2008:

    I got a call from citibank last week, they offered me a card and everything, I accepted it, just waiting for it to arrive, they’re a pretty big company, but business are business and they may close up from night to day, no matter how big they are

  3. Comment by Older88 on 11 January 2008:

    I don’t know, these companies deal with large amounts of money, but they also deal with big insurances, in case of a loss, don’t they?

  4. Comment by Kaiomy on 11 January 2008:

    I hope they do not collapse lol, they are a great company, at least for me, I can’t imagine what it would be like if a company like Microsoft collapsed, it would be such a huge mess!

  5. Comment by Aura on 12 January 2008:

    If such big company collapses, there is plenty of investors to jump in with money to recover it, as it is such a famous brand, so I wouldn’t worry so much

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