Here we go again. Barely two months after President Obama sacked the CEO of General Motors — and less than a week after the outright nationalization of that firm was announced — the head of yet another U.S. corporation is in Washington’s sights. According to the Wall Street Journal, the Federal Deposit Insurance Corporation is pushing for a “purge” of Citigroup’s top management, and already has contacted a potential candidate to replace CEO Vikram Pandit in the top job.
The move comes only weeks after the Federal Reserve concluded — after conducting extensive “stress tests” — that Citigroup needed only $5.5 billion in additional capital to withstand a worsened economic climate, a relatively easy task for the firm. But now, the FDIC — chaired by Sheila Bair — seems to be moving the goalposts, expressing discontent with not just Citi’s financial state, but the type of experience held by top managers.
Pandit’s ouster is not a given — other bank regulators haven’t yet signed up to Bair’s Madame DeFarge agenda. But the mere prospect of another beheading by Washington is enough to send chills through the spine not just of other CEOs, but of all Americans who rightly wonder: where will this end?