voa economic report - Citigroup's Prince Resigns as CEO

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is the VOA Special English Economics Report. Last week, told you about big losses at the investment bank Lynch. But the losses may be even bigger at nation's biggest bank, Citigroup. Citigroup estimated this week that would take losses of eight billion to eleven billion on investments in risky housing loans. Many people who houses with subprime mortgages are now unable to pay back. The estimated write-downs are for the bank's current , October through December. Citigroup says they represent five to billion dollars after taxes. The bank reported six and half billion dollars in credit-related losses for the third of the year. Charles Prince, Citigroup's chief executive officer, under pressure on Sunday. He led the New York-based since two thousand three. He took over for Sanford who built Citi into one of the world's largest groups. Win Bischoff, chairman of Citi Europe and a and German citizen, will serve as chief executive for . Former United States treasury secretary Robert Rubin was named of the board. He will help lead the search a permanent replacement for the CEO... Charles Prince was second head of a major bank to be forced in recent days. Last week, Stan ONeal resigned at Lynch after his company reported a loss for the quarter of over two billion dollars. Merrill Lynch had write-down eight billion dollars in mortgage-related losses. Citigroup announced it has fifty-five billion dollars worth of investments directly to subprime mortgages. Forty-three billion dollars of that is complex investments called collateralized debt obligations. A big problem banks is putting a value on the mortgage-related securities they hold. Investors are no longer interested in trading securities. This has frozen the market for them. So like Citigroup depend on mathematical models to place a on these complex investments. Credit rating agencies reacted to week's bad news. Moody's Investors Service lowered Citigroup's credit one level to its third highest rating. Moody's said expected write-downs would result in a sizeable quarterly loss Citigroup. And that's the VOA Special English Economics Report, by Mario Ritter. To learn more about the problems subprime mortgages, go to voaspecialenglishcom.. I'm Steve Ember.

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