I watched a speech by Simon Johnson at UCSB and, at one point, he claimed that Citigroup has failed three times since the 1980s. For example, he claims that Citigroup failed and was saved by the government in 1982 because of "bad loans made in emerging markets". The second such failure is at the end of the 1980s because of "bad loans to commercial real estate". The third is of course the 2008/2009 financial crisis.

What strikes me as odd is that the first two alleged failures are not mentioned in Wikipedia on Citigroup! He doesn't appear to me as a crackpot as he is the former chief economist of IMF and effective whitewashing of the US's biggest bank holding company on Wikipedia is as unlikely. Does anyone know what affairs is he referencing?

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    $\begingroup$ Out of curiosity, why isn't this better fitted for History SE? $\endgroup$
    – NNOX Apps
    May 25 '20 at 3:38

(I worked there for 23 years.)

Simon Johnson is correct. Citi (or its predecessors) was insolvent on those 3 occasions, and would have gone into liquidation without the bailouts by U.S. taxpayers.

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    $\begingroup$ Also, can you reference a book, paper or news articles going into these affairs at any details? $\endgroup$
    – user552
    May 23 '20 at 19:07
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    $\begingroup$ ok gooling: late 1980s bailout: money.cnn.com/magazines/fortune/fortune_archive/1991/01/14/… ; euromoney.com/article/b1fpt94q2k4c10/… early 1980s bailout: en.wikipedia.org/wiki/Brady_Bonds (the Wikipedia article does not explain, but primaily this was done to save Citi with bad emerging markets loans) $\endgroup$ May 23 '20 at 19:14
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    $\begingroup$ The bailouts were presented as "US helping indebted countries such as Mexico" although a major motivation understood by informed observers was to save Citi and other US banks that had lent to Mexico. (Some analogies to the rescue of Greece in Eurozone Crisis here). $\endgroup$
    – noob2
    May 24 '20 at 13:49
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    $\begingroup$ I don't have any numbers, but I don't think any other major bank had the kind of EM exposure that Citi's predecessor had and, in alternative history, would have gone under if the U.S. had not bailed out EM in the 1980s. $\endgroup$ May 24 '20 at 14:06
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    $\begingroup$ Please edit additional information into your answer. $\endgroup$
    – Wrzlprmft
    May 25 '20 at 8:02

For 1982, I suggest you read the FDIC's "History of the 80s". Volume I, Part 2, Chapter 5 covers the "LDC Crisis" (EM Crisis in contemporary parlance, though it was mostly Latam).



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