BORROWED TIME

During the 2008 financial crisis, Citi was presented as the victim of events beyond its control—the larger financial panic, unforeseen economic disruptions, and a perfectstorm of credit expansion, private greed, and public incompetence. To save theeconomy and keep the bank afloat, the government provided huge infusions of cashthrough multiple bailouts that frustrated and angered the American public.But, as financial experts James Freeman and Vern McKinley reveal, the 2008 crisiswas just one of many disasters Citi has experienced since its founding more than twohundred years ago. In Borrowed Time, they reveal Citi’s history of instability andgovernment support. It’s not a story that either Citi or Washington wants told.From its founding in 1812 and through much of its history the bank has been tied tothe federal government—a relationship that has benefited both. Many of its initialstockholders had owned stock in the Bank of the United States, and its first president,Samuel Osgood, had been a member of the Continental Congress and America’s firstPostmaster General. From its earliest years, Citi took massive risks that led to crisis.But thanks to private investors, including John Jacob Astor, they survived throughoutthe nineteenth century. in the twentieth century, Senator Carter Glass blamed Citi CEO “Sunshine Charlie”Mitchell for the 1929 stock market crash, and the bank was actually in violation of thesenator’s signature achievement, the Glass-Steagall law, in the late 1990s until thenU.S. Treasury Secretary Robert Rubin, engineered the law’s repeal. Rubin laterbecame the chairman of the executive committee of Citigroup, helping to oversee thebank as it ramped up its increasing mortgage risks before the 2008 crash.The scale of the financial panic of 2008 was not, as the media and experts claim,unprecedented. As Borrowed Time shows, disasters have been relatively frequentduring the century of government-protected banking—especially at Citi.