As banks struggle to navigate the financial crisis, a late report from the WSJ suggests the feds may create a government bank that would buy up bad assets.
And earlier in the day Citigroup revealed that it is, in fact, splitting into two operating units -- going forward with its own version of a "good bank/bad bank" strategy.
Citigroup's core commercial, retail and investment banking worldwide -- the good bank -- will be reorganized as Citicorp and led by Citigroup Chief Executive Vikram Pandit.
The other unit -- to be called Citi Holdings -- will include brokerage, retail asset management, consumer finance and a pool of risky assets. The bank is considering selling off Citi Holdings assets, or letting them mature.
The retail brokerage assets include its remaining stake in Smith Barney, and Nikko Cordial Securities, as well as Primerica Financial Services.
The bank said it was searching for someone to run Citi Holdings.
Critics of the bank, who argue it had become too big and complex to manage, have demanded a break-up for some time, although most envisioned Citigroup splitting into separately capitalized companies, instead of separate operating units consolidated onto the same balance sheet.