BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Guess Which Big Bank CEO Was Missing At Today's Big Fed Meeting

This article is more than 10 years old.

Wall Street's top CEOs sat with Federal Reserve Governor Daniel Tarullo to discuss the central bank's recent round of stress tests but a very big player was missing from today's meeting.

Citi says Pandit was invited but was unable to attend.

Citi CEO Vikram Pandit was absent from today's meeting which gave the CEOs the opportunity to air out their concerns over new regulations.

Meanwhile, his peers including Lloyd Blankfein of Goldman Sachs, Jamie Dimon from JPMorgan Chase, James Gorman of Morgan Stanley, Brian Moynihan from Bank of America, Richard Davis of US Bancorp and Jay Hooley from State Street, were all able to make the meeting in New York--Pandit's homebase.

What's interesting about Pandit's absence is that it comes not long after Citi failed the Fed's latest round of stress tests. It also comes on the heels of a somewhat embarrassing compensation mess for Pandit in which Citi shareholders have voted against a proposed $15 million pay package for the CEO.

Citi says Pandit was indeed invited but that he had other meetings and obligations in California and therefore unable to attend.

Under normal circumstances that might be okay. However, as the the CEO of a bank that just failed a major regulatory stress test and who was then given the chance to sit with fellow banking  CEOs to raise concerns about the requirements, I'd say attending should have been a bigger priority.

There were reports after the recent round of stress tests of some banks being critical of the stress test process. The banks questioned the gaps between their own capital estimates and the Fed's estimates. But the criticism goes both ways as the Fed reportedly was unhappy with the way banks were calculated potential losses under the stress tests.

For Citi the failed stress test means no dividend hike for investors. It also doesn't bode well for Pandit who told analysts during an earnings call last month that Citi may forgo the opportunity to resubmit its capital plan this year. Instead it might wait for the 2013 round of Fed stress tests.

“As we consider out resubmission we also have to keep in mind  that we’ll be submitting the 2013 capital plan to the Fed a short time later later,” Pandit told analysts.

In the meantime, Citi is talking to the Fed about what it must submit and management will consider those factors when making its decisions. Today's meeting might have been a good opportunity to at least voice some of that concern.

Though its not like Tarullo was offering much guidance today. The Fed's summary of today's meeting notes that the neither Governor Tarullo nor Federal Reserve staff would, during the meeting, respond or reply to views expressed by the CEOs.