Big news in the banking world today as Citigroup announces that Vikram Pandit is stepping down as CEO. He'll be succeeded by Michael Corbat who runs the European and Middle Eastern operations for the banking giant. Pandit's key lieutenant, and Citigroup President John Havens is also stepping down.
Citigroup's not the biggest bank in America anymore, but it's a byword for the rise of megabanking since it was the merger between Citibank and the Traveler's Group insurance company that provided the nail in the coffin for the old Glass-Steagall rules against universal banking. The fact that Clinton administration Treasury Secretary Robert Rubin later found himself perched atop a financial bohemoth whose very existence was predicated on Clinton-era regulatory changes is emblematic of the nexus between Wall Street and Washington that's been such a marked element of U.S. political economy. That the resulting company more-or-less blundered into one of the more desperate needs for government rescue during the financial crisis is really just the icing on the cake.
Here, for example, is the performance of Citigroup's stock since Pandit became CEO:
Not so good! I dare say that presiding over the destruction of 88 percent of the value of an enterprise is a job many of us could probably pull off. And yet Pandit managed to earn tens of millions of dollars for his trouble, so obviously he's a much sharper businessman than the average person.