Citigroup Inc Chief Executive Vikram Pandit is pinning his hopes for an economic recovery on the developing markets where his company already has a firm foothold.
The world needs new growth drivers besides U.S. consumption and credit creation. Emerging markets offer one potentially powerful source, Pandit said in a speech on Monday at the Global Financial Forum, a conference organized by BritishAmerican Business, Chatham House and the Foreign Policy Association.
That strategy for economic recovery would work especially well for Citigroup, which Pandit called a pervasive force in the more than 100 countries where we have a local presence.
Citigroup may be strong abroad, but at home it is still trying to clean up the effects of the last two years. It suffered huge losses and was forced to accept three government rescues in 2008 and 2009.
Also on Monday, the U.S. Treasury said it would start selling off its 7.7 share stake in Citigroup.
In the future, credit should grow in line with GDP -- not as a multiple -- and the savings rate must increase, Pandit said in prepared remarks Citigroup provided before the speech.
He acknowledged the possibility of a double-dip recession but said he believed that the U.S. economy is likely to avoid slipping backward.
Pandit also reiterated recent calls for responsible finance, urging strong and clear regulatory reform, including a level playing field for the global financial industry and a clear regulatory authority to resolve the fate of systemically important institutions that become endangered.
At Citigroup's annual shareholders meeting last week, Pandit said responsible finance is the driving force behind the culture of the new Citi, and it is defined by the interests of our shareholders, customers and colleagues.
(Reporting by Maria Aspan; Editing by Steve Orlofsky)