Financial Markets

 John Reed finally publicly comments on the difficulties Citigroup faces today. Walter Wriston and John Reed  built the global diversified financial services company over four decades(1960-2000);  Sandy Weil and Chuck Price pillaged and nearly destroyed it in 5 years.

In a rare interview, Mr Reed said it was unclear whether the company’s model or its management deserved the greater share of blame for its problems. But he said Citigroup turned out to be a “sad story”.

“The specific merger transaction clearly has to be seen to have been a mistake,” Mr Reed said.

“The stockholders have not benefited, the employees certainly have not benefited and I don’t think the customers have benefited because our franchises are weaker than they have been.”

Later in the article:

In a thinly veiled criticism of Mr Weill, Mr Reed said Citi’s problems began a few years after the merger. “It is a very sad story. Once we got the benefits from the merger in the first two years after the deal, we were not able to sustain a business model that gained traction,” he said.

Citi’s troubles today are a culmination of a set of problems. There has been a general weakening of the management fabric,” he said. “If the body loses its immune system, you are going to die of something. The core of what was happening was a lack of supervision and structure at the managerial level.”

Read the full article here.