Global impact of Citibank

The World

Citigroup is based in New York City but the country operates in 106 countries and has the largest global reach of any bank so it truly is too big to fail. This former Citigroup executive in Britain said if the bank were to fail the consequences would spread to every corner of the globe. The U.S. government agreed to back more than $300 billion dollars of Citibank’s loans and securities, and inject $20 billion into the country. The bailout raises several questions: what exactly is an American company these days? Citibank employs thousands of workers in countries around the world, so why is only the U.S. government responsible for Citibank’s anemic performance. This professor says because they’re here and are effectively an American corporation doing business around the world, and Citibank’s failure is a U.S. failure because of irresponsible lending in the U.S. The former Citibank executive says Washington wants it that way also, and wouldn’t want foreigners controlling the bank. But some say Washington hasn’t done a good controlling Citigroup and other multinationals, and this analyst says that’s got to change when these companies ask for American bailout money. He says there’s been precious little debate over these questions. If that sounds like a U.S. approach to a global crisis, this analyst says that’s how it should be.

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