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November 6, 2007

Citigroup appoints Stuckey to oversea sub-prime exposure

by Gill Montia

Story link: Citigroup appoints Stuckey to oversea sub-prime exposure

Citigroup, the world’s largest financial services group, has appointed Richard Stuckey to oversee its $43 billion exposure to American mortgage-related assets.

Mr Stuckey is well known for his role in winding up Long Term Capital Management, the hedge fund that collapsed in 1998 with losses of $4.6 billion.

The appointment follows yesterday’s warning by the bank that it could be forced to write off up to $11 of its sub-prime related assets.

Should this be the case, post-tax losses of between $5 billion and $7 billion are expected to follow.

It is understood that Mr Stuckey will set up a dedicated team to focus solely on managing the group’s sub-prime-related assets.

Robert Rubin, the former US Treasury Secretary, took over as chairman of Citigroup at the weekend, after Chuck Prince, the bank’s chairman and chief executive felt compelled to step down.

Mr Prince’s departure occurred only days after that of Stan O’Neal, chief executive at Merrill Lynch.

The combined losses of Citigroup and Merrill Lynch currently stand at around $20 billion on their investments in asset-backed securities.

 

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