Citigroup Inc. chief executive Vikram Pandit is expected to reiterate to a congressional panel Thursday that Citi is on a sound foundation, and that he supports regulatory reform that would strengthen consumer protection.
"While some reform measures could have a significant cost impact on our industry, Citi believes they are necessary," Pandit said in his prepared remarks before the panel that oversees the Treasury Department's Troubled Asset Relief Program.
His bank "is positioned to contribute to the economic recovery," he said and thanked Americans again for the government's support of Citi in the days when its survival was in question.
Tarp "built a bridge over the crisis," he said.
But Citi has changed, he reiterated. Pandit's new management team scaled back proprietary trading and other risky practices, and started to shrink its assets and operations through cost cuts and the sale of businesses. "Our leverage is 12 to 1, down from 18 to 1 when I became CEO" in late 2007. That, he said, is part of "the lesson we have learned from the financial crisis."
"Citi is now a smaller institution that is focused on being a bank, not a financial supermarket," he said. "Diversification does not always work" to protect a bank from risk, he said, and called for "smart common-sense government regulation to reduce the risk of more bank failures" and home foreclosures, he said.
In addition, "a key lesson of the financial crisis is that what starts as an issue that affects consumers can become an issue for the entire financial system," Pandit said.
Hence, "I strongly believe that consumer protection can and should be strengthened at the federal regulatory level." And apparently referring to state pre-emption and non-financial institutions, he said: "There should be uniform national standards that apply to all market participants who provide financial products to consumers and a level playing field."
