Will Citibank Survive?
Mar 22, 2008 - 05:03 AM By: James_Turk The center of focus this past week on Wall Street – and indeed, much of the financial world – was whether or not Bear Stearns will go belly-up. As questions arose about the quality of its $395 billion of assets that were carried on only $12 billion of equity, its customers and other brokers became unwilling to accept the counterparty risk that arises from transacting with Bear, while its lenders began worrying about repayment. Being leveraged to that extent, even a small decline in the value of its assets can significantly erode the firm's equity base. But given that Bear is no more than the fifth largest broker in the US , it is a relatively small fish in the financial world.... The question therefore becomes, what are Citi's assets worth? As explained above, we can't accurately answer that question, but here is some information to ponder. (1) Citi has $133.4 billion of Level 3 assets. Here's how MarketWatch recently described thi...