Washington needs to govern The Citigroup

The U.S. government wants, after media reports of up to 40 percent of Citigroup participate. The stock markets are celebrating the move, the basic problems of U.S. banks are thus not resolved.
Already holding the U.S. government on preferred shares worth 45 billion U.S. dollars, around 8 percent of Citigroup. Guarantees for risky assets worth more than $ 300 billion will be added. Now, as U.S. media reports, the state share of up to 40 percent of the shares rise. This brings the nationalization of the once largest bank in the world with around 350,000 employees in more than 100 countries closer. Even the Bank of America is as hot candidate for nationalization traded. The shares of both banks on the stock markets set to be strong and spur on the weekly Start and other financial assets around the world.

Puzzles remain, however, the reasons for the increase in price. Finally, the big American banks – just like their European and Japanese competitors – de facto nationalized. No head of government, it has in the past weeks and months will be noted that a second bankruptcy case, à la Lehman Brothers will no longer occur. In an emergency always jumps to the state.

Basically changes for Citigroup, the situation with the likely increase in the state share little. Since the beginning of the crisis, the Bank as one of the hottest candidates for a collapse. For months, pushing the markets before they give him and also with calming pills not satisfied. So Citigroup had already mid-January, its Smith Barney securities business for 2.7 billion euros more than the rivals Morgan Stanley and previously sold its German retail banking business for 5.2 billion euros to the French Crédit Mutuel losgeschlagen. However, there does not calm the stock market, the stock is now a gambler and paper falls ever further. So long, until eventually the government, the Bank will take over the majority – any bet.

But more important than the question of how much percent of the state, ultimately to keep Citigroup, is what he and his investment actually wants. One idea already brokered the sale of Smith Barney, according to estimates by the insiders can be attributed to pressure from the U.S. government came into being. Whether the move was so smart, however, is questionable. The course was well afterward, and the bank is still a long-term yield pearl lost. It is precisely the business with private customers whose deposits for refinancing needed, is in crisis attractive for banks. Also on the sale of the Mexican Grupo Financiero Banamex, which since 2001 belongs to Citigroup, Washington should insist.

This all looks like patchwork, a Masterplan is not apparent. It would be wiser if the state is not 40 percent of Citigroup take over, but the majority to durchzuregieren. Then, finally, the markets are calm, because the obvious is true: Washington can no longer bank fall. But then Barack Obama must be the government and especially their Finance Minister Timothy Geithner say what the Citigroup will be and whether her boss Vikram Pandit can remain.

Nationalization and the calming of the speculators is one thing, a management plan for the other, larger, more important project, which the government must address. Otherwise, the Citigroup not come to rest. The government, whose ideas on the future of the banks have so far remained ambiguous, however, should be taken to ensure that the markets then the other institutions through nationalization.

At the end could be a completely nationalized U.S. financial system, – an incomprehensible scenario for the market once so credulous United States. But one that is closer than many people think only of its enforcement would, anyway what is the unvarnished reality: The system is destroyed, a new start is needed.

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