Citi CEO says US believes in privately held banks; Volcker says capitalism to survive – what next?

Reuters released a letter today from embattled Citigroup CEO Vikram Pandit assuring employees that the bank is fine, just fine (no numbers provided, thank you) and that the US believes in a privately held banking system. The letter doesn’t provide a link to the Wall Street Journal story saying Treasury plans on boosting its stake in the ailing giant.

He signs the letter simply “Vikram.”

Only this past Friday former Fed Chairman Paul Volcker stated that he believed capitalism will survive this crisis. What will our next assurance be –a statement from the ratings agencies  that  US Treasury securities will always be AAA-rated?

Here’s the text of the Vikram Pandit letter (hat tip to ericjackson for the link):

Dear Colleagues:

As you know, financial markets around the world remained under great pressure this week, again fueling speculation about additional intervention in financial institutions by the U.S. government. As we continue to navigate these unprecedented times, I want to reassure you that I remain very confident in Citi’s prospects and business position around the world. Our Tier 1 capital base is very strong and is one of the strongest in the financial services industry. Additionally, we continue to focus and make progress on reducing the assets on our balance sheet, reducing expenses and streamlining our business for future profitable growth.

While rumors and speculation persist in the market, I want to highlight for you statements earlier today from U.S. government officials. The White House reiterated that it “continues to strongly believe that a privately held banking system is the correct way to go.” Additionally, the U.S. Treasury Department said it “plans to preserve a financial system that is owned and managed by the private sector.”

I know how challenging these times are, and ask only that you continue your outstanding work in serving our clients and customers around the world. Your hard work is generating results that we are seeing on a daily basis. We need to continue to do our part to instill confidence in the financial system. Building confidence starts with each and every one of us communicating the strength of Citi to our clients and customers every day.

With our presence in more than 100 countries, Citi continues to be uniquely positioned to benefit when the global economies rebound. Thank you for your continued effort and dedication.


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