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Citi's Shakeup — The "Why": The surprise resignation of Citigroup CEO Vikram Pandit "was the culmination of months of growing board disenchantment," says the Journal. Citi's failing the most recent stress tests, shareholders' thumbs-down in the last say on pay vote, and the stock's overall poor performance during his five-year tenure fueled the frustrations. Wall Street Journal, Financial Times, New York Times, Washington Post
Citi's Shakeup — The New Boss: The papers profile Pandit's successor, Michael Corbat, a "low-profile leader" with a "methodical approach" (FT) and a "company man" who's worked his whole career at Citi and its predecessors (the Journal).
Citi's Shakeup — What It All Means: A new premium on blocking and tackling, apparently. The papers depict Corbat as a roll-up-your-sleeves-and-get-your-fingernails-dirty manager, in sharp contrast to the chin-scratching intellectual Pandit (a "shy technocrat," in the FT's words). Corbat's the kind of leader who volunteers for unglamorous jobs like overseeing Citi Holdings, the company's garage sale of unwanted legacy businesses; Pandit's the kind of leader who writes op-eds proposing lofty ideas like the benchmark portfolio. Both come from that amorphously defined world known as "Wall Street" (Corbat got his start at Salomon Brothers; Pandit went from Morgan Stanley to a hedge fund to running Citi). But the FT interprets the change as part of a global industry trend of "boring bankers" taking the reins from investment banking's "masters of the universe." (Shy technocrats can be masters, too, we suppose.) Corbat's in-the-weeds experience better suited a newly assertive board led since March by veteran commercial banker Michael O'Neill.
Citi's Shakeup — Abandon All Hope Ye Who Enter Here: For all of the progress Pandit made cleaning up Sandy Weill's mess, and for all of Corbat's operational skills, there's still skepticism and uncertainty about the megabank's prospects, as evidenced by these headlines: "Meredith Whitney: No CEO Can Fix Citigroup" (Journal); "Pandit's departure restores air of calamity" (FT).
Dodd-Frankenstein: A Journal editorial criticizes the CFTC for planning an appeal of a court ruling that struck down the agency's position limits for commodity derivatives. The court said the Dodd-Frank Act did not require the agency to write the rule, which means the CFTC must prove such a policy is needed before implementing it — a requirement that the editorial suggests the regulator is trying to circumvent by challenging the judge's reading of the law. Meanwhile, the CFPB's student loan ombudsman (a position that Dodd-Frank did specifically call for) tells Post columnist Michelle Singletary that "on the basis of the complaints the CFPB has received, he is concerned that we face a student-loan-servicing sequel that will rival the home-mortgage crisis." In the bigger picture, the Times' "Deal Professor" columnist Steven M. Davidoff, gives a coulda-been-worse assessment of the much-criticized reform law: "Despite Its Problems, Dodd-Frank Is Better Than the Alternatives." Specifically, he argues that the law's answers to the problem of too-big-to-fail institutions — the "regulatory tax" of increased supervision for megabanks and the requirement of living wills — are more realistic than the pundit-favored solutions of forced breakups and higher capital charges. Also, if you haven't already, be sure to check out American Banker's Dodd-Frank Reform Watch blog, a one-stop shop for aggregated news on this far-reaching legislation.