Rubin Exits Citi, as Bank Talks to Morgan

Rumors floated late last year that Citi, in a bid to raise additional capital, was looking to offload certain assets and business units. Smith Barney is one attractive asset, but the bank has expressed reluctance to parting with it.

Rubin joined Citi in 1999 after serving as Treasury Secretary under President Clinton. He will remain a director until Citi's annual meeting in April. In the bank's statement, he said he intended to "deepen his involvement in outside activities and organizations to which he has been strongly committed."

"This is not a decision that I have come to lightly," Rubin said in the statement. "But as I enter my 70s and with all that is now in place at Citi, I believe the time has come for me to make these changes."

Richard Ferlauto, the director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees, or AFSCME, says Rubin's resignation opens the door for "new needed blood onto the board." AFSCME is an investor in Citi.

"The most important thing for Citi right now is to rebuild itself from the bottom up," Ferlauto says. The company needs "a whole set of directors who have a different vision for the company."

Ferlauto adds that the new board members should have "significant retail experience," who understand international banking and "have a sense of how to do effective M&A," he says.

Rubin's resignation comes as analysts brace for yet another quarterly loss recorded in the fourth quarter by the banking titan as credit reserve builds keep rising and writedowns continue.

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