Citigroup board in crisis talks

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By Greg Farrell and Henny Sender in New York - http://www.ft.com/cms/s/0/29017c6a-b99c-11dd-99dc-0000779fd18c.html

Citigroup’s board was on Sunday locked in crisis talks debating the future of the bank and its top management, as hopes faded it could ride out the relentless pressure on its share price without a bold announcement before trading opens on Monday.

Following a 60 per cent slump in the stock price last week, the board is considering all options, according to a source familiar with the proceedings, including a change in top executives, the sale of some prized assets or an outright merger. Representatives of the New York Federal Reserve, as well as Treasury officials, are also monitoring developments.

According to one person consulted on the bank’s plans, Citi’s main move could be to create a “bad bank” along the lines used by UBS last month.

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Moreover, the Fed, which was involved in trying to save Bear Stearns and find strategic alternatives for Lehman, has taken a more hands-off approach, say people familiar with the matter.

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