Citibank shares fell 4% on the news.
3/13/12, "Four US banks fail Federal Reserve stress test," BBC
"Four US financial institutions, including Citigroup, have failed stress tests designed to show they could withstand a financial shock.
The Federal Reserve said Citi, SunTrust, Ally Financial and MetLife failed to show they have enough capital to survive another serious downturn.
Citigroup is the third-largest US bank. The majority of the 19 tested passed.
All those tested are in a much stronger position than they were after the 2008 financial crisis, the Fed added.
The Fed tested the banks' ability to withstand a similar crisis that triggered a rise in unemployment to 13%, a 50% fall in share prices and a 21% drop in house prices.
Their strength is assessed by the amount of "buffer" best-quality assets, known as Tier 1 capital, they would hold if such conditions occurred....
"One problem (for Citi) is too much exposure in Europe," said Chris Lowe from FTN Financial in New York.
"It can shift its global focus, but obviously that's going to take time," he added.
The banks with the best ratio were Bank of New York Mellon, at 13.1%, State Street on 12.5% and American Express at 10.8%.
"I think the tests are quite significant," said Matthew Bishop, US business editor of the Economist.
"Even the banks that failed like Citigroup failed largely because they were planning to hand too much money back to investors... had they not handed any money back to investors, they probably would have passed."
The Federal Reserve has been conducting stress tests since 2009, but these were the first where results were made public."...
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Image of Obama and bankers accompanied the Rolling Stone article from Dec. 2009 posted on the blog InfiniteUnknown.net. I'm guessing it came from Rolling Stone but not sure.
12/10/2009, 'Obama's Big Sellout,' Rolling Stone by Matt Taibbi
(Original article follows, copied by me long ago. Now archived for a fee at Rolling Stone I believe. ed.)
"Barack Obama ran for president as a man of the people"......
"So on November 23rd, 2008, a deal is announced in which the government will bail out Rubin's messes at Citigroup with a massive buffet of taxpayer-funded cash and guarantees. It is a terrible deal for the government, almost universally panned by all serious economists, an outrage to anyone who pays taxes. Under the deal, the bank gets $20 billion in cash, on top of the $25 billion it had already received just weeks before as part of the Troubled Asset Relief Program. But that's just the appetizer. The government also agrees to charge taxpayers for up to $277 billion in losses on troubled Citi assets, many of them those toxic CDOs that Rubin had pushed Citi to invest in. No Citi executives are replaced, and few restrictions are placed on their compensation.
- It's the sweetheart deal of the century, putting generations of working-stiff taxpayers on the hook to pay off Bob Rubin's fuck-up-rich tenure at Citi.
"If you had any doubts at all about the primacy of Wall Street over Main Street," former labor secretary Robert Reich declares when the bailout is announced, "your doubts should be laid to rest.""...
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