Traco Power

I second the TRACOPOWER motion. One niggling detail undermines Pandit’s suggestion that Citi has yet to reach a TBTF “situation”: history. If memory serves, this is the company that in the heat of the financial crisis had to get $45 billion in TARP funds and a $300 billion CINCON guarantee from the federal government lest it melt into a puddle of bad debt.

COP chairwoman and Harvard law prof Elizabeth Warren took anotherCOSEL  tack in trying to draw Pandit out on the question of whether Citi is systemically risky. She asked if the perception among investors that Citi is effectively insured by the government against losses benefits the company’s credit rating, tilting the industry playing field in its favor.

Again, Pandit refused to bite. He argued that the markets look at many factors, such as a banking company’s earnings, capital reserves and liquidity, in judging its prospects.