Page last updated at 10:13 GMT, Thursday, 22 January 2009

Citi wants further help for banks

By Karen Nye
Business reporter, BBC News, New York

Citigroup headquarters in New York
Citigroup was bailed out by the US government in November

Citigroup's new chairman says that if the US government took bad assets off bank balance sheets, banks might be able lend more money.

Richard Parsons told the BBC that he hoped the government would use money already earmarked to help US banks to buy such assets.

He acknowledged that Citi was not lending as aggressively as in the past because of "balance sheet issues".

A shortage of credit is a major factor behind the economic slowdown.

"We can off-load bad assets in return for making commitments to be more robust on lending," he said.

But he denied a quid pro quo: "It's not a situation of, you do this for me, and I'll do that."

He indicated that the bank could be interested in a government programme offered to the sector but Citigroup would not approach the government directly.

Mr Parsons said the money could come from the $700bn financial rescue fund authorised late last year.

Citigroup has already received $45bn of government funds as part of last year's banking bail-out.


Mr Parsons appointment is the latest management reshuffle at Citigroup, which is reeling after a massive loss last year.

Citigroup's share price

He replaces succeeds Sir Win Bischoff, 66, who will retire as chairman from Citigroup later this year.

Vikram Pandit was named chief executive just over a year ago after Charles "Chuck" Prince resigned.

Mr Parsons has been a director at Citi since 1996.

He is best known in corporate America for his years as chief executive of the media company Time Warner, from 2002 to 2007.

Citi is not Parsons's only banking experience.

Before joining Time Warner, he headed Dime Bancorp, a New York-based savings bank.

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