A UK Personal Finance Blog – The result of direct exposure to the fallout of the financial crisis.


The Rotten Core of CitiGroup


Find in World May 31st, 2012 - 5,525 views

If you want to know why the world is currently in financial turmoil then this is a very insightful read: http://www.bloomberg.com/news/2012-05-31/woman-who-couldn-t-be-intimidated-by-citigroup-wins-31-million.html

To summarise, Citigroup (a whopper of a US bank with all sorts of questionable ties and one that received a massive bailout from the US Government) sold mortgages and they also bought mortgages from other financial institutions.

It then sold on these mortgage debts to other lenders and that alone is enough to make some people’s head spin.

The debts were sold on because they had value because the people who actually owed the money were paying interest.

Lenders often sell off their mortgages, it’s quite common.

The problem with Citigroup is, it was doing so much of this it failed to identify bad debts.

They did at first but then the volumes became so high they couldn’t check them all.

Citigroup got greedy (what’s that? a greedy bank? Who would have thought…)

It turns out people did identify some of these bad debts but not only did Citigroup try to brush them under the carpet, they also asked some of their staff to falsify documents to make some of the bad debts look good!

The link above is all about one woman who refused to participate and who blew the whistle on the whole fiasco resulting in a large settlement being paid to the US Gov’ment and her in turn receiving $31 million dollars as a kind of reward.

The moreĀ I read, the more I got the feeling that Citigroup may have been hugely responsible for much of the aftermath of the financial crisis.

Here’s the link again: http://www.bloomberg.com/news/2012-05-31/woman-who-couldn-t-be-intimidated-by-citigroup-wins-31-million.html

 

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