Tuesday’s Headlines: Should the Big Banks Split Up? The Citi Debate Rages On

When Citigroup’s former CEO Sandy Weill called for the breakup of big banks, the blogs and online commentary went wild. But the bank’s new head is quick to argue to the contrary, the Financial Times reports:

Vikram Pandit said Citi, formed in Mr Weill’s time with mergers such as the acquisition of Travelers in 1998, had already gone back to the basics of banking, and aside from some global markets businesses had sold most of the units from that deal. “What’s left here is essentially the old Citicorp,” he told the Financial Times. “That’s a tried and proven strategy. Why did it work? Because it was a strategy based upon operating the business and serving clients and not a strategy based on deal-making. That’s the fundamental difference.”

Citi’s growth by acquisition was credited with ending the church-and-state philosophy of retail and investment banking, but by shedding $600 billion in assets, is returning to its old model. The bank credits half of its business on emerging markets and the growth potential of these regions.

Other News:

Barclays and the Absa Group of South Africa are in talks to combine their African units. [Bloomberg]

UBS is launching a unit that offers prime brokerage and direct-execution trading services in an effort to attract quantitative hedge funds. [Bloomberg]

Wall Street banks have informally agreed to a 25-day "quiet period" after IPOs. [WSJ]

Examining the Ponzi scheme through the mind of the con artist. [DealBook]

Fannie and Freddie will pay all earnings to taxpayer as a measures to wind them down more rapidly. [Financial News]

The Government of Singapore Investment Corporation offered $1.5 billion for a bankrupt hotel group owned by Paulson. [Reuters]

Sovereign wealth funds of China and Singapore each invested $500 million in a natural gas plant by Cheniere Energy Partners. [Reuters]

The vital link between jobs and banks. [Businessweek]