Which CEO to Blame for Citi's Woes?

When former Citi CEOs start sniping at each other in the press, you know things can't be good. Today's story in the FT is quite astonishing, for the quotes it gets from both John Reed and Sandy Weill:

"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." ...
"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." ...
Mr Weill rejected Mr Reed's views and said Citigroup's model had been a success. "What John and I created in 1998 was a model that worked very well for customers, employees and shareholders," he said. "What didn't work was that we had very poor management and management decisions over the past couple of years." Mr Prince was chief executive during that period.

Interestingly both Reed and Weill blame poor management for Citi's woes. Given that they were the people charged with managing a financial behemoth the likes of which this country had never seen, one wonders how much either of them blame themselves. Judging by this story, and as one might expect, Weill will never admit his culpability, while Reed is more self-critical.

What about their successors? No one rates Chuck Prince very much, and I suspect that even he reckons he could or should have done better. As for Vikram Pandit, his hiring of old buddies from Morgan Stanley goes to show just how shallow Citi's managerial bench really was - but it's also unlikely to work very well. Being an executive at an elite white-shoe investment bank simply doesn't qualify you for the same job at Citigroup - not unless you have a bunch of commercial bankers working alongside you who know what they're doing and can help with the institutional knowledge. And it's not clear that Pandit has that.

The big-picture story, however, is that no one can manage Citi effectively: it's simply too big. Getting fired was the best thing that happened to Jamie Dimon: right now he's the savior of the US financial system, whereas if he'd succeeded Weill as planned, he'd be just another whipping boy.