Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, October 16, 2007

Citigroup Woes Continue

As criticism of Citigroup CEO Charles Prince mounted, the company admitted the obvious -- that its risk management models failed during the summer's credit crisis.  The company suffered a 57% drop in third quarter profit and wrote off $3.55 billion because of deteriorating security prices, leveraged loans and bad trading debt.  It also set aside an additional $2.24 billion reserve to cover future losses.  NYTimes, Citigroup Acknowledges Poor Risk Management; WSJ, Citigroup Model Is Left Shaken By Credit Crunch.

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