'In the Eye of the Storm': Citi CEO Vikram Pandit Sees a Difficult Recovery Ahead: Knowledge@Wharton

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'In the Eye of the Storm': Citi CEO Vikram Pandit Sees
a Difficult Recovery Ahead
Published: October 02, 2008 in Knowledge@Wharton

As negotiators in Washington struggled to devise a plan to

rescue Wall Street and avert a global financial catastrophe,
Citigroup CEO Vikram Pandit noted during an interview at
Wharton last week that even with government intervention,
global financial markets will need years to recover. In a
question-and-answer session with Wharton management
professor Michael Useem just days before Citi announced its
deal to acquire Wachovia's assets, Pandit also described Citi's
banking-focused strategy and urged students to pursue careers
that would let them do what they love.

MICHAEL USEEM: So Vikram, I want to thank you for This is a single/personal use copy of
coming and in particular for coming this week. And in Knowledge@Wharton. For multiple copies, custom
reprints, e-prints, posters or plaques, please
particular for coming today, no less, in that this has been the contact PARS International: reprints@parsintl.com
week that was. If you've looked at the web you realize that P. (212) 221-9595 x407.
Congress has apparently come up with a deal. They're walking
over to the White House to talk that through.
So I'm going to begin with a couple of questions, if you don't mind, about the world of financial services
the last couple weeks, and then we'll probably get a bit more personal. But, to use a metaphor here, it
probably felt like a perfect storm the last couple weeks -- maybe the [last] several months. You've been
at the eye of the storm. What do you think went wrong? And, once we get that worked through, what do
you think we're going to need to put in place to insure that this scale of systemic risk is not going to be
looking at us in the eyes as it has over the last year to year and a half. So what happened? What do we
need to do?
VIKRAM PANDIT: How much time do I have?
USEEM: Take the time you need. This is the big question.
PANDIT: First of all, I appreciate all of you being here. It's great to see so many bright young faces.
Your alumni have done great things for us as a Citi, and we hope many of you will consider what they've
done as being something that you aspire to. We hope to see many of you at Citi in the future. I also want
to say that -- exactly, what Professor said here -- we've been through a very interesting time. I just want to
make sure that you all know that you have been great at picking exactly the right time to be in school.
This is a perfect time to be doing what you're doing and I'm hoping, by the time you all get out, we'll be
on the other side of this.
There are many different ways of coming at this, and I don't think there are any easy answers in terms of
what happened, why we got here and how we're going to think about the architecture of the financial
system going forward. You've got to put all this in context. If you really think about where we are, in the
U.S., we have a lot of imbalances. Many of those are not new, but some of them are. When we think
about imbalances, there's a housing imbalance. There's just too much housing compared to the demand,

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and it's not clear exactly when and how the housing market [will be] cleared, where the prices stop.
There is a consumption/saving imbalance. Everybody thought they were saving because their housing
prices were going up. Well, they no longer are. And the U.S. consumer has to start saving at some point.
When you look at the financial system around the world, [it became] overloaded over a period of time.
They have to figure out how to de-lever themselves. And the last point, which I think is also important,
there's a lot of growth elsewhere in the world and the world is trying to figure out how to grow without
causing inflation. Each of these four is very important rebalancing cycles that we're going to have to get
right as a country.
Any one of these would be incredibly difficult to get through, but to have all four happen at the same
time is quite important and quite interesting, because it's quite a challenge. And how do these things all
rebalance? You all are students of finance and economics. [You know that] usually what happens is the
marketplace figures out exactly how to make all of these things rebalance so you get from here to there.
And the reality is that, with these four things happening at the same time, that's a lot of stress on the
markets. You're expecting the markets to clear a lot of information, which is very hard for it to do. And
the result of that is some of the things you saw last week: Markets breaking down and not being able to
go from here to there.
Now, what's important-- because this is, by the way, for all of you here-- it is a good time to be in school,
because this is a challenge. It's going to take some while for us to get out of this and I'm hoping that we
don't go through a couple of weeks like we just went through. While we don't mind working weekends,
it's something to be working 18 days straight. So I'm hoping we don't go through the same kind of events
we saw, but the fact is there are a lot of challenges ahead of us and we need to be very realistic about
that. How did we get here? How did all of us get here? How did the industry get here? You know that's
difficult. I'll tell you a couple different perspectives on this. The starting point was really post-9/11. It's
an important point in time because that's the last time that we had some concerns about the economy--
what was going to happen-- and the result of that was a lot of monetary stimulus into this market. You all
know what that means. The Federal Reserve Bank started printing money. And the impact of all of that
was interest rates coming down. That was also a point in time when there were a lot of foreign surpluses
because of exports and whether it was ... funds or whether it was foreign central banks, there was a huge
demand for fixed income paper and you could never get enough yield.
And as a result of that, the engineers on Wall Street started figuring out, what do we do? How do we
satisfy this demand for yield? And what they did as a result of that was they looked all the paper and
assets that were around and figured out you could actually take this, we can securitize it, slice and dice
them into pieces, sell them, provide good yields to the other side. And it worked. It was beautiful. And,
by the way, that's exactly how capital markets should work. You all understand as finance majors and
business school students, arbitrage is a key part of what keeps markets going. That arbitrage was
incredibly important. A lot of demand for high, fixed income yield and securitized paper to provide that
yield. That part was good. But Wall Street ran out of inventory of paper. So what happens? "Let's go
create some new paper." And that's when the housing industry started taking off, because you needed to
create new mortgages, so that you had enough inventory to create securitizations to sell the yield to the
other side.
That was the beginning of the housing price cycle, housing prices going up. So far, so good. You keep
going and say okay, now what happened and how far did it go? And we all know it went a very long
time. There were a couple of things that were really important, though, that got everybody sort of out of
kilter. Usually when these bubbles happen, it's almost always because of the fact that you miss the forest
for the trees. And the way this cycle- People missed the forest for the trees. They relied on the rating
agencies, the paper coming off was triple-A. Triple-A paper. Think about that. If you're a risk manager
and you say, "This is a triple-A piece of paper." And they stress it. How bad can it be? I'm not so sure
too many would say it could go to zero. I can understand it can go down, but there are not too many
people in any risk management area that's going to say it's going to go down to zero. So that was the first
thing. The second thing that everybody relied on was while this securitization. And this paper was made
to satisfy the fixed income demand out there, this paper was distributed wildly. The risk was distributed--
so back a year ago, in July, when all this started, people were pretty relaxed about it. They said, "You
know what? This risk, I know there's risk, but it's fully distributed. Each one of us own $3.50 of this, so
what's the big deal? We can take the losses, move on."

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what's the big deal? We can take the losses, move on."
The other major surprise was that 15 to 20 large financial institutions owned basically all the risk. Now,
you know. So the reason why we're here today is, in many ways, the fact that a large group of people
missed the forest for the trees. It's not that they weren't managing risk correctly. They were. But how do
you think about risk in a triple-A bond? It's very hard to figure out what that is. It's not that they weren't
thinking, "Well, you know, I want to make sure these things are priced correctly." They were. But they
assumed everything was fully distributed. You make very different assumptions if you thought 15 people
owned all the risk. And the net result of all of that is that through everything that happened, the real
shock to the financial system was that the banking industry, as a result, did not have enough capital to
cover the losses that were coming through.
And the result of that is what you're seeing in the markets today. A lack of lending by banks. It is a mad
fervor to say, if I am too overleveraged as a bank, how do I sell assets to de-lever and in that cycle, what
happens is that you get to the kind of strains and stresses that occurred over the last couple of weeks,
where people say, "Well, you know, if these financial institutions have taken losses and they have to
de-lever, I am not so sure I want to own their stock or their bonds. I don't know what the risk profile is."
And it creates a little bit of panic.
So that's what happened. Now it was important for me to share that with you. I can do this in sound bites,
by the way, very well as well. But you are all students of finance and I wanted you to sort of understand,
sort of piece by piece, what came together. I don't know if you're ever going to stop this "forest for trees"
problem and I'm not so sure that's an objective, ever. No risk means no business. So the reality is that it's
not about removing the risk of having these kind of things happen; it's about trying to find some balance
and optimizing and finding a financial system architecture that can help you deal with these things so
you don't get to the kind of stages we got to. One thing we all have to keep in mind is that the
architecture, the regulatory architecture of the U.S. was set in the first 30 years of the last century and
there were changes to it, but not enough. ... Now the principles haven't changed but the technology has
changed a lot, and so a big part of what we have to do is re-do the regulatory architecture of the U.S.
financial market. And when you think about that, it's going to have to be as comprehensive as it was,
following the '20s of the last century and what happened in the '30s -- '33 Act, '34 Act, '35 Act and on
and on and on. That's [what] we're headed towards.
Right now, we've got to deal with what's going on today, how do we get out of it, how do we get to the
other side. As I said, we still have a lot of challenges, but there will be enough people thinking about this,
there will be enough dialogue on what is that financial services architecture that we want that's probably
the best answer to how we're going to make sure that we have the ability to see the forest for the trees.
Because the regulatory architecture and the regulators have the best ability to do that.
USEEM: Let me pick up on that and ask about the next 12 months. Congress looks like it's going to act,
the market's up today. To paraphrase Winston Churchill, is the end of the beginning or the beginning of
the end? What do you see coming up the next 12 to 18 months?
PANDIT: The interesting thing about what we talked about earlier, all these imbalances that are out
there, we know the system has to deal with them and get to the other side. The other side is, by the way,
a beautiful place. It's gorgeous. You know, you've got growth inflation balance, you've got housing
stabilized, everybody saves money, there are plenty of jobs, you know, it's a wonderful place and what
economists can never tell you is what is the path you're going to take from here to there. And we all
know that what we're going through; there are probably not too many good paths. There are a lot of okay
paths, but there are some that are really bad and we saw one of those in the last couple of weeks.
And so, you know, the real question keeps coming back to how are we going to re-balance this. And let's
think about that for a second. Housing needs to find a bottom. Well, how's it going to find a bottom if it
turns out the banks are not lending to people who want to buy homes or mortgages? It's an important
point. The U.S. consumer needs to start saving. Well, how's the U.S. consumer going to do that when the
housing prices are going down and frankly we're going through an unemployment cycle and
unfortunately, I don't think we're done on that. Banks need to de-leverage. Well, how are they going to
do that when they are levered about 10-20% more than they should be? Where is that going to come
from? How is that going to happen? If you give them two years, they can earn enough to earn into the

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leverage. But, in the meantime, not one loan gets made. So you have a lot of issues that are out there that
you have to work though. So when you think about all of those, I think that you have to think about the
markets in two different parts. One what is going to happen to the real economy, which is unemployment,
GDP growth, etc. And what's going to happen to the financial markets.
I would think that most people who look at what's going on would come to the realization that the
economic news is likely to get worse. It's a real possibility. And our best guess is it's going to be
something that's challenging, probably through at least the middle of next year, maybe all the way
through the end of next year and we'll have to exactly what that means. The other side of that is what
happens to the financial markets. These are markets that are going to be continually volatile. Again
because, you understand, we have a lot of strain on the markets to clear these imbalances. And so you're
going to have a lot of volatility over the next few quarters. But suffice it to say, that it is not an issue that
has going unnoticed. The best thing I saw was last Thursday night you had the leadership of the House,
the leadership of the Senate, you had the SEC, you had the Treasury Secretary, you had Bernanke of the
Fed, you had the Republicans, you had the Democrats, you had them all come together and say this is an
issue [this is] a national issue and we're not going to let the financial system get damaged along the way.
That's a positive. And so the answer to where we're going to be in the next 12-18 months is one where we
have to recognize there are going to be economic challenges, the markets may be volatile, but the real
answer to where we're going to be is going to depend on policy responses that you get out of Washington.
That's probably the single biggest driver that's going to tell you where we're going to be in 12-18 months.
USEEM: Vikram, let me bring the issues here closer to home. Citi on many metrics is the biggest bank
in the world ... In a sense, you've been through your own earthquake, if I can mix my metaphors here, in
that Fannie [has] new ownership, Freddie [has] new ownership, AIG in a sense [has] new ownership.
Lehman gone. Bear gone. Merrill acquired. Just think about your landscape at Citi now for a few minutes
as the world, as your competitive landscape, has dramatically changed; probably as big a set of changes
as you've ever experienced. What's your thinking? What does Citi have to do? What's the restructuring
you may be thinking about?
PANDIT: The first point I'd make is that, if on January 1 st, somebody told you these are the things that
are going to happen, how many people would have predicted that in here.
USEEM: Like zero.
PANDIT: Okay. That tells you what kind of volatile environment we're in. And so this is a time of
uncertainty which in itself is something new. This is a once in a many generation event, so watch it, learn
from it. It's a lesson we're going to leave for a future generation, make sure they understand exactly what
can go wrong, how you deal with it and all of that. And I'm sure case studies and textbooks are going to
be written on it. Here, we'll keep plenty of our finest faculty busy for a period of time. Nobody could
have predicted what we've gone though, nobody. But it was very clear to us at Citi, when we looked at it
with the new management team at end of last year, the very end of last year, as we saw what we saw
around the world -- and we see a lot, because we're in 109 countries. We see a lot of data. There's no
other institution that has as much information as we do, in terms of what's going on in the world
economies. Outside of the capital markets, maybe the U.S. government, we probably have the largest
store of information.
We saw a lot of this and it was very clear to us that while, early on, we had our challenges and people
said, "Look at Citi, look at those losses." [We were] almost completely convinced [that] by the time we're
done nobody was going to be spared. So how do you get ready? It's a question of how do you get ready
for a perfect storm. Now again, we didn't predict it, but we had a high degree of probability in our mind
that something was going to happen which was completely unconventional to standard thinking. The first
thing we had to do coming in was say, "Okay. Survival is the game. What do you need to?" And that's
what you do when you go into a perfect storm. So, as of now, we raised about $60 billion of capital.
That's a lot of money. That's more money than most banks have as capital in the world. That was step
number one. Raise a lot of capital. Make sure you're extremely well-capitalized, because you cannot rely
on financial markets to provide you funding at the time of need. Number one.
Number two, make sure that we look at -- and by the way, every bank -- what does a bank do? Banks
take deposits and they put them to work. They take deposits, put them to work, they can be mortgages,

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etc., etc. Make sure that you're well funded. You have not only enough equity and capital, but you have
enough long-term debt, long term funding, everything up and down and you put it to work in the right
way. So we had the financials down very, very clearly and that was really important. And by the way,
that is of enormous value, when you look at where we are today vs. where we were about six, seven,
eight months ago, believe it or not. Through everything that happened in the last couple of weeks, we
were definitely a pillar of strength in the world markets. We had money coming in, flight equality vs. a
lot of the other institutions on the Street. The other thing we decided was it's not only capital. Is there
something wrong with the business model? What do we need to do? How do we need to look at it? And
it became pretty clear to us the business model is relatively straight forward. We're a bank. We take
deposits, we put them to work.
So the question is where do you want to take deposits and where do you want to put them to work? Now
we know that if you take deposits in Houston and put them to work in Houston real estate, that's not a
great idea. We've seen what's happening. You're all too young to know this, but there are cycles that
happen and you say, "That is just not the right thing to do." The best model is you take deposits, in every
form, around the world, from all kinds of people -- retail, high net worth, corporations -- and put them to
work everywhere, anywhere around the world. That's the diamond model. And so what we said is,
"Well, that model is very clear. That's a global universal bank." And frankly, we were almost there
anyway. We had a few more hobbies in addition to that. So we said, "Let's clean out all the hobbies. Get
rid of the hobbies. Focus on the core. That's the core. And once you think about a bank that way, you
say, "Have a great treasury function, have a great risk management function. Make sure you have
diversified deposits and diversified places where you put it to work." That's the core of the bank. Very,
very simple. That's the diamond of models.
And in May, which was about 5 months after the new management team got in, we took a group of
people, sell-side analysts, newspaper reporters, investors through that and said, "You know, our core
strategy is simple. We are a bank. But we happen to be unique because we're the only global universal
bank. We can raise money in 109 countries and put it to work in 109 countries." And that's an extremely
valuable strategy. Well, a number of things were written on it. My most favorite statement was in a
magazine where it said, "The May 9 th event, where Citi talked about its strategy was devoid of any
content." That was my most favorite word, in terms of what people talked about. Now, this is important
because of what has come true over the last two weeks. It's that if you want to be a financial services
company, you cannot be a mono line as easily as you were before. You can not be in the risk taking
business and have funding in the wholesale market. It's very difficult. The last two just became a bank.
I'm getting no more questions about the model anymore, from anybody. Which, I think, if there's
anything to be thankful for, that's great. So we've been executing against that model in a very, very
steady way. That's our model; we're a global universal bank in 109 countries. We take deposits from
corporations, high net worth and retail and we put them to work in cards, in our sales and trading
business, in proprietary investments. And we run that as well as we can and I don't know of any other
company that has the kind of model we do.
Our challenge, as I said, to all our people and all the investors were never the strategic aspect of the
assets we owned, we came into this market, not following the basic principles of raise deposits
everywhere and put them to work in a diversified way. Unfortunately, we came in, raising deposits
everywhere and putting it to work mostly against U.S. real estate. The other lesson you learn from all of
these things is any time anything goes wrong and you lose money, it's almost always because you have a
concentrated position in something. Diversification is really at the heart of any risk management that
you're talking about. Concentration, we came in concentrated into this market, concentrated in real estate,
concentrated for that matter against the U.S. consumer. We had a large, long U.S. consumer position,
which is why we had to go through the financial losses.
Now unfortunately, we're not alone. Because the world is long on the U.S. consumer. However you look
at it, the world is long on the U.S. consumer. It's true of the other banks. We figured out Lehman was
long on the U.S. consumer. Okay? I mean, they're all long on the U.S. consumer. That Chinese stock you
bought that's down 50%? Well, that's the U.S. consumer. Doesn't matter. The world is long on the U.S.
consumer. There's some risks you just can't get rid of, but I think it's sort of an interesting perspective to
say that when you run a bank, you want to be not concentrated. And it's probably the one lesson that
everybody is going to take away from this as well, which is the good old diversification method of

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managing risk is a wonderful way of making sure you survive and you do well through everything that's
happened.
So as far as Citi is concerned, our strategy is set, we have a structure against the strategy. I've spent a lot
of time making sure I have the right leadership group that's working with me, for all of you who think
about management leadership. By the way, leadership management is a team sport and you have to have
the right team. We've done that. We have against that a growth strategy that says most of the growth is
outside the U.S. 35% of cities in the emerging markets, which makes it the single largest financial
services company in the emerging markets. It's a great place to be. By the way, we've been there for more
than 100 years. We've been there when it was not cool to be global or cool to be in the emerging markets.
We've been there in Calcutta since 1902 and Shanghai since 1902, Yokohama, Mexico City, Philippines.
It doesn't matter. We've been there for more than 100 years and so we are going to drive this globality.
The last part of the Citi strategy is relatively simple and it is not new. As a matter of fact, it's been the
cornerstone of the company for 200 years that we've been around. And every one of the leaders of the
company has talked about that, which is to say, the core strategy of Citi has always been to bring in the
most talented people and to develop them, train them, give them opportunities to grow so they can drive
the company to the next level and that goes back, at Citi, for 200 years. And when you look at the Street,
and everybody talks about these things nowadays, but you go back, we were ahead of the curve at least
50 years, in terms of thinking about what our core competitive advantage was. And the core
competitive advantage was the people, and how we selected them, how we brought them in and what
they did for the company. So that's Citi, through all that's going to happen here, for the next few months,
etc. I want to assure all of you that we are on campus in the same way we always have been on campus.
We need you. We need what you're going to bring to us, we need your talents and we need it in 109
countries.
USEEM: Speaking of talent, let me make this a bit more personal. We're going to open this up in about
10 minutes. PhD out of Columbia. You were investment banking at Morgan Stanley. You run a hedge
fund, private equity, and now you run an enormous enterprise. Really, a two-part question here. What's
the common thread, as you have led, whether a private equity, a hedge fund, investment bank and now
an enormous universal bank. What are some of the common capacities, if you will, that really cut across
all those areas, that have helped you do what you do. Second side to that, though, is how is it different at
Citi from leading a hedge fund, a private equity fund and investment banking back at Morgan Stanley?
PANDIT: I guess the common thread is I haven't been able to keep a job.
USEEM: Just keep moving.
PANDIT: Just keep moving. It's always hard to look back and figure out exactly what happened and why
it happened and what was the cause, all of that. It's almost fruitless to think about that. The basic, basic
concept of doing well to me is you've gotta go with something you like to do. You have to do that. It's all,
"Find your passion and go after it." And if you don't know what it is, find a place that will help you find
your passion. So that's the first thing. And having spent all those years getting degrees, granted from a
lesser institution than this -- don't tell anybody about that.
USEEM: Columbia is a great school.
PANDIT: Yeah. It's absolutely clear. I love finance. I do love economics and it was very clear to do that.
The other thing that's very clear is that when you think about what group you want to join, what
company you want to join, where you want to go, it almost always comes down to two things. One, do
you like the people? And two, is this an environment where you can learn and invest in yourself? So the
second common thread is keep learning. This is, by the way, not the end of your learning. It's just the
beginning. And I guarantee you that, once you leave here, that's when your learning truly starts. I'm not
saying you're not learning great things. I'm saying that this is when you get prepared, get the skills to
know how to learn. So that's the second thread, which is that if you really want to enjoy what you're
doing, you have to keep investing in yourself and learning. And find a company where you like the
people and the company allows you to invest in yourself. And then that's it. Don't worry about your
career, what you're doing. If you do that correctly, it's going to lead you to the right spot over time. And
that's the chaos theory, by the way, of careers. But there's something there that works. I keep telling our

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that's the chaos theory, by the way, of careers. But there's something there that works. I keep telling our
people, the younger ones, that you're here because we want you to learn, we want you to invest in
yourself. Half our profits today come from areas we were not in five years ago. How do you teach
somebody that? How do you train somebody for saying, "You're an expert in this business."
In financial markets, more than anywhere else, if you really are good at this and figure out how to make
money, it gets arbitraged away. They're very fast moving markets. So how do you teach yourself, how do
you train somebody, how do you learn, how do you invest in yourself for knowing that whatever I'm
doing today may not exist in five years. And how do you teach yourself to say, "I'm going to make sure
that I go from here to the next to the next..." Or find the next, etc. That's one of the beauties of the
financial service industry. It's one of the beauties of Wall Street that you have many institutions with that
culture that allow to think about things that way, despite all the changes that are occurring that will still
remain the common theme, which is, as I tell my people, "You're here. You're doing things, that's great.
But the fundamental thing you're doing when you're younger is you're investing in yourself, your learning
and we're paying you to educate yourself. What a wonderful life.
USEEM: Excellent. Good. I've got one final comment, that amounts to a very personal question. I
actually have been in one of your predecessors' offices and, I don't know if you're in the same office that
Sandy Weil had, but it was a wonderful corner-
PANDIT: I can't afford his office. It was a different office.
USEEM: It was quite an office. But you're probably over looking Park Ave. there. Just a couple of words
for us all. What does it feel like to get off the elevator, second floor, is that where you are?
PANDIT: Third Floor.
USEEM: Third-floor elevator, there you are there, these days, probably early in the morning. What's it
like to walk into the office? What gives you a high during the day? And what's the tougher part of a
typical day? And maybe you ought to go back before the last couple of weeks, so take it before the
crisis. And maybe just add a word, if you wouldn't mind, about what life has been like, in the office, very
personally, over the last two weeks.
PANDIT: Right. Well, there are a lot of questions in there. Let me see. You know, again, life for me is
relatively straightforward. If you don't enjoy waking up in the morning and say, "I really want to go to
work," you shouldn't be doing what you're doing. A lot of us, over time, will earn the right to say, "Stop,
enough. I don't enjoy that. Well, that's not where I am." So the bottom line is when you get into that
door, you have to go in saying, "I'm looking forward to everything I'm going to do today." And that's
what I think about when I go in. And that makes a lot of sense because I feel privileged to be part of an
organization that's 200 years old, part of an organization that has saved many countries around the world
by providing funding and advice at the right time. I'll come back to a story about that, just three weeks
ago. Privileged in the sense that we have 350,000 very talented people around the world who are serving
our clients and privileged to say that I can be part of any policy mechanism or any agenda that has to do
with making sure the financial markets work well. All of those things are great. And you've gotta, with
those kinds of attributes, you have to walk in feeling very privileged in what you're doing. You also walk
in with a great sense of responsibility and burden when you do that, because you have to add to the
legacy of the people who brought you here and created this company and brought it to what it is today.
So I cannot tell you there's any typical day. There isn't, for me.
The one thing that is absolutely clear is there's no way I could do what I'm doing without the team that is
around me. And it's, on the broader scale, 350,000 people, but there's a smaller group than that that
works with me constantly, day in-day out, and a lot of the fun and the excitement is about interacting
with them and interacting with the visitors we have. And the last couple of weeks haven't been different.
They haven't been different because, again, you walk in, not knowing what's going on and that was pretty
clear in the last couple of weeks. But also, almost the entire 18 days was spent with a group of people,
constantly talking to each other, constantly dealing with the central banks around the world, regulators
around the world, finance ministries around the world, government officials around the world-- trying to
get a handle on what is happening where around the world. Trying to know exactly what is the
information flow telling you, trying to know exactly what advice could you give to the central bankers to

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'In the Eye of the Storm': Citi CEO Vikram Pandit Sees a Difficult Recovery Ahead: Knowledge@Wharton
( http://knowledge.wharton.upenn.edu/article.cfm?articleid=2068)

say, "This is what you need to do for this to happen." And what value and leadership can you provide, as
one thinks through everything that is going on, to Wall Street, to Washington, say, "Let's looks at these
things this way, because this is better for the financial system." No part of what we went through has
been exciting, necessarily. It has been challenging, but I've got to say that there is occasionally a thrill of
exhilaration when you come up with an idea that says, "This is what we should do." And it was great to
have had the ability to be a part of that discussion.
Let me end with one thing, it's really interesting. We had a great operation in Kenya. We've been there
for a number of years. This was about 4 or 5 weeks back. Something happened where it turned out that
for whatever reason, the banking system was overloaded and the central bank couldn't handle the
overload. So we stepped in. We literally acted, essentially like the central bank, for eight whole days. It's
a fascinating story because it tells you the power of Citi around the world, in many of the countries we're
in. We're in the back end of many central banks, of many financial systems. We see flows like nobody
else. Last week, every day we traded $6 trillion of flows through Citi. Just imagine trading $6 trillion of
flows without errors, making sure everything goes to the right place. And there were many times, it
could have stopped. And we were there to make sure that every bank knew, and every central bank
around the world knew where the pressure points are and what needed to get done. It was an exciting
couple of weeks, what can I say.

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