New York: Vikram Pandit, the chief executive of Citigroup, has said the banking behemoth's putting in lot of money against US real estate is one of the main reasons for things going wrong at the company.
"... What went wrong is we had tremendous concentration in the sense we put a lot of our money to work against US real estate. So how we got here is ... by lending money and putting money to work in the US real estate market in a size that was probably larger than what we ought have done on a diversification basis," India-origin Pandit said in an interview to the popular PBS' Charlie Rose on Tuesday.
The US government late on Sunday came up with a multi-billion dollar rescue plan for Citi after its shares plunged last week wiping out nearly half of its market value.
As part of the deal with the American government, Citi would be receiving fresh capital to the tune of $40 billion in addition to standing guarantee to the bank's assets worth $306 billion.
According to Pandit, there were already a set of assets "unduly" concentrated against the American resid when he took over as chief executive less than a year ago.
“As I got into this job about 11 months ago, I came in with a set of assets were which unduly concentrated against the US residential market," he said in the interview.
On the rescue plan, Pandit pointed out that the real question was about the confidence in the financial markets.
"And so the real question over the weekend was one, again, of confidence in the financial markets...And for our part, we raised capital wi we actually bought insurance from the government," he added.
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