Citigroup CEO Says Company Did Everything it Could, Short Sellers to Blame

By: • Tue, Nov 25 2008, 7:52 PM

Citigroup CEO Vikram Pandit said short sellers and plummeting confidence in the financial system are to blame for the plunge in Citigroup's stock last week.

In an interview with the Charlie Rose Show, Pandit said his company is not too big to manage, and they did everything they could to raise money and reduce their operating costs ahead of the $20 billion bailout plan finally handed to them by the U.S. government this week. The U.S. government also guaranteed up to $306 billion of Citigroup's risky assets.

Pandit said although his role as CEO of Citigroup was to function as a risk manager, the problems in the U.S. economy were too large to dodge.

He said the U.S. economic crisis was caused by investors who focused too much on the U.S. real estate market, and said "you've got to attack housing directly" to solve the United States' economic problems.

Pandit said U.S. Treasury Secretary Henry Paulson's plan to pump $800 billion to support mortgages, small businesses and consumer loans, introduced today, is "very interesting" and is the "beginning of what we need to do."

Furthermore, he said, future U.S. President Barack Obama's economic team announced this week is "one of the best" you could put together.

Pandit said going forward, more fiscal stimulus is needed, as well as a plan to take over bad assets that banks don't want.

As for his own company, Citigroup is going to become a "bank that does the basics," he said, and will serve clients in a very "streamlined" way. He said access to government money has helped substancially, and his own people are working hard to generate revenue. Nevertheless, he said, the bank needs time to put these changes through.

On a upbeat note, Pandit said he felt this weekend was a turning point for confidence, which is a "necessary condition for anything else," and that it is unfair to say bank lending isn't happening.