Opinion - Letters to the Editor

Citigroup bailout

This refers to the editorial “Innovative package for Citigroup” (Nov. 26). Investors should not be rejoicing over the $300 billion-plus bailout package that helped rescue Citigroup. They should instead look at it with trepidation. The tumbling of a bank that withstood the financial maelstrom all these days is deeply unsettling. American banks have the protective shell of impunity, provided by their government in the form of bailout packages. Let us hope the U.S. government will learn in time — unlike the father who remains in the hope that his son will change his ways every time he bails him out — and stop pampering the financial institutions.

Shahnaz Mohamed Thahir,

Edappally

As rightly pointed out, lax internal controls and the ineffectiveness of regulatory oversight in the context of non-transparent assets are the root causes of the Citigroup’s fall. It authored its destiny by over-indulging in financial innovation. It violated basic rules of banking to re-engineer new generation products such as securitisation, asset/mortgage-based securities, credit default swaps, collateralised debt obligations, etc. Hard work, thrift and savings were subordinated to luxury beyond means resulting in abject penury of the financial colossus.

India should learn the right lessons from the U.S. financial crisis and stop addressing issues relating to the markets alone. We should concentrate on developing all facets of the economy.

N. Rangarajan,

Srirangam

The unending series of bailout packages is the result of mismanagement of funds by greedy bigwigs, who cared little for the result of their policies. It is strange to find a state that has advocated the free market philosophy stepping in at this hour of crisis.

M.S.R.A. Srihari,

Khammam

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