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Feds To Fire Another CEO? FDIC Plans Citi Beheading

Posted By James Gattuso On June 5, 2009 @ 12:06 pm In Economics | Comments Disabled

Vikram Pandit, CEO of Citi, testifies on the use of Troubled Asset Relief Program (TARP) funds before the House Financial Services Committee at the US Capitol in Washington, DC, February 11, 2009.

Here we go again. Barely two months after President Obama sacked [1] the CEO of General Motors — and less than a week after the outright nationalization of that firm was announced — the head of yet another U.S. corporation is in Washington’s sights. According to the Wall Street Journal [2], the Federal Deposit Insurance Corporation is pushing for a “purge” of Citigroup’s top management, and already has contacted a potential candidate to replace CEO Vikram Pandit in the top job.

The move comes only weeks after the Federal Reserve concluded [3] — after conducting extensive “stress tests” — that Citigroup needed only $5.5 billion in additional capital to withstand a worsened economic climate, a relatively easy task for the firm. But now, the FDIC — chaired by Sheila Bair — seems to be moving the goalposts, expressing discontent with not just Citi’s financial state, but the type of experience held by top managers.

Pandit’s ouster is not a given — other bank regulators haven’t yet signed up to Bair’s Madame DeFarge [4]agenda. But the mere prospect of another beheading by Washington is enough to send chills through the spine not just of other CEOs, but of all Americans who rightly wonder: where will this end?

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/06/05/feds-to-fire-another-ceo-fdic-plans-citi-beheading/

URLs in this post:

[1] sacked: http://www.foundry.org/2009/03/30/youre-fired-obama-fires-gms-ceo/

[2] Wall Street Journal: http://online.wsj.com/article/SB124417114172687983.html

[3] concluded: http://www.foundry.org/2009/05/07/tarp-and-stress-tests-now-can-banks-return-the-money/

[4] Madame DeFarge : http://en.wikipedia.org/wiki/Madame_Defarge

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