FDIC Pushes for Citi Exec Changes: Report

CEO Vikram Pandit's hold on the top spot at Citigroup could be in jeopardy as the Federal Deposit Insurance Corp. is pushing for a shake-up of the bank's top management, a report says.
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CEO Vikram Pandit's hold on the top spot at

Citigroup

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could be in peril as the Federal Deposit Insurance Corp. is pushing for a shake-up of the bank's top management, a report says.

The

Wall Street Journal

reports federal officials have reached out to Jerry Grundhofer, the former

U.S. Bancorp

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CEO who recently joined Citigroup's board, to seek his interest in the top job. The

Journal

report cited people familiar with the matter.

Grundhofer didn't return calls from the

Journal

seeking comment. Grundhofer, the newspaper reports, is well-regarded in the industry for making U.S. Bancorp profitable while avoiding the risky lending that hurt Citigroup and other banks.

FDIC officials are concerned about the lack of senior executives with experience in commercial banking, the

Journal

notes. Pandit has an investment-banking background, but most of the bank's current problems stem from troubled consumer loans.

Meanwhile, the FDIC, under Chair Sheila Bair, recently pressed a fellow regulator to lower the government's confidential ranking of Citi's health -- a change that would let regulators control the firm more tightly, the

Journal

reports.

The FDIC's tougher position toward the bank is setting up a clash between regulators, some of whom disagree with the FDIC's position, and between the FDIC and Citigroup, whose officials have argued that Bair is overstepping her authority, the newspaper reports.

Citigroup has received $45 billion in funds from the U.S. government's Troubled Asset Relief Program. After a planned share conversion, taxpayers will own up to 34% of the company.

The FDIC traditionally hasn't been as assertive in management of a large firm. But the FDIC is heavily exposed to Citigroup, the

Journal

reports. The FDIC is helping finance a roughly $300 billion loss-sharing agreement with the company, and it also insures many of Citigroup's U.S. bank deposits.