The Great Recession

The Citigroup Breakup

Ailing financial behemoth Citigroup, whose shares today fell to their lowest level since the bank’s last government bailout, in November, is going to break itself into pieces to survive. As expected, today it sold a controlling stake in its Smith Barney retail brokerage to Morgan Stanley; Citi will also “place unwanted assets and businesses worth more than $600 billion—a third of its balance sheet—into a ‘non-core’ unit to isolate them from healthier parts of the company,” the Financial Times reports. The move is expected to make Citi look a lot more like the old-style Citicorp. The new unit, which will eventually be sold off, will stay on the company’s books but, to cheer investors, its results will be reported separately. Bloomberg is reporting that CEO Vikram Pandit could announce the plan next week.