Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Citi Mulls Options After Crisis

NEW YORK -- Citigroup shareholders may have finally gotten what they wanted -- the resignation of chairman and chief executive Charles Prince -- but Wall Street's worries are far from over.

At an emergency meeting of the Citi board Sunday, the largest U.S. bank announced Prince's widely expected departure but also estimated that it would take additional losses of $8 billion to $11 billion. In the third quarter, it already took a hit of $6.5 billion in asset mark-downs and other credit-related losses.

Citi said former U.S. Treasury Secretary Robert Rubin, once co-chairman of Goldman Sachs, will be chairing the beleaguered bank. Sir Win Bischoff, chairman of Citi Europe and a member of the Citi management and operating committees, will serve as interim CEO.

Meanwhile, the company remains entrenched in a mire of off-the-books investment vehicles funded by risky debt. Citigroup may need to take the fall for them if they fail.

And Citigroup is not alone in its debt problems. When borrowers with poor credit stopped paying their mortgages, many banks not only had to take losses on those subprime mortgages, they also saw instruments in their portfolios backed by mortgages plummet in value. No one knows how much longer home prices will keep slumping and whether problems related to the housing market will start affecting other types of consumer debt.