As the commercial real estate market began in the spring of 1990 heavily exposed banks such as Citibank and Chase Manhattan crash remained largely under-capitalized. John Reed, chairman and CEO of Citibank, was caught surprised by the sudden slump. While Reed fought to the capital reserves of us keep his bank further weaknesses within Citi began to emerge. It also lacks the arrival of the real estate crisis, Citi had poorly managed internal operations, acquisitions overrated a … Read more »

As the commercial real estate market began in the spring of 1990 heavily exposed banks such as Citibank and Chase Manhattan crash remained largely under-capitalized. John Reed, chairman and CEO of Citibank, was caught surprised by the sudden slump. While Reed fought to the capital reserves of us keep his bank further weaknesses within Citi began to emerge. In addition, the coming of the real estate crisis had badly missing Citi internal operations had managed overvalued acquisitions and become difficult due to organizational excess. The poor management left Citi in the custody of the Federal regulators, concerned about the solvency of banks. The case examines the roots of these problems and the steps taken reed to the bank to a well-run and stable institution.
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from
Julie M. Wulf,
Ian McKown Cornell
Source: Harvard Business School
17 pages.
Release Date: 6 February 2012. Prod #: 712 446 PDF-ENG
Citibank: Weathering the commercial real estate crisis of the early 1990s, HBR case solution

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