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Citigroup foresees credit as expensive
By Jeff Karoub |
June 17, 2009, Wednesday
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Print Edition
Print Edition
BORROWERS should accept a new world of tighter, more expensive credit as financial institutions recover from months of bad loans, failed banks and foreclosed homes, Citigroup Inc's chief executive said on Monday.
During the past few years, "United States consumption and credit creation were the two main drivers of growth," Vikram Pandit told a conference of business, economic and government leaders in downtown Detroit. "The world needs new drivers of growth - and a new business model."
Pandit's speech closed the first day of the three-day National Summit, which is expected to draw about 3,000 attendees to Detroit over three days. The goal of the summit is to craft a plan to keep the United States competitive in manufacturing, energy, technology and the environment.
Restructuring
Pandit says he anticipates less credit that is more costly even as financial markets show signs of recovery. He also expects more corporate restructuring across different industries.
Citigroup has been among the most troubled banks throughout the crisis, receiving US$45 billion in federal funds. Last month, the government determined that it would need to raise an additional US$5.5 billion as a buffer against future losses.
Investors have criticized its board and management for allowing the bank to make big investments in the risky housing market - actions that led to Citigroup reporting billions in losses.
He acknowledged that Citigroup has "received much help along the way."
Pandit praised "strong government action" for starting to turn things around in the banking sector.
During the past few years, "United States consumption and credit creation were the two main drivers of growth," Vikram Pandit told a conference of business, economic and government leaders in downtown Detroit. "The world needs new drivers of growth - and a new business model."
Pandit's speech closed the first day of the three-day National Summit, which is expected to draw about 3,000 attendees to Detroit over three days. The goal of the summit is to craft a plan to keep the United States competitive in manufacturing, energy, technology and the environment.
Restructuring
Pandit says he anticipates less credit that is more costly even as financial markets show signs of recovery. He also expects more corporate restructuring across different industries.
Citigroup has been among the most troubled banks throughout the crisis, receiving US$45 billion in federal funds. Last month, the government determined that it would need to raise an additional US$5.5 billion as a buffer against future losses.
Investors have criticized its board and management for allowing the bank to make big investments in the risky housing market - actions that led to Citigroup reporting billions in losses.
He acknowledged that Citigroup has "received much help along the way."
Pandit praised "strong government action" for starting to turn things around in the banking sector.
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