Essay: Citigroup retail banking-Suggestions
Evidently, there is overall economic challenges both locally and globally. To view this fact well is the aspect of high rate Loan defaults especially in the subprime market that has been in the rise throughout the year 2007. This is because as interest rates on adjustable-rate mortgages reset, some borrowers becomes overburdened and cannot pay the resultant high monthly payments (Michael, 2007).
Thus, the rising interest rates raises the cost of borrowing for all lenders, which blocks banking firms earning high revenues since housing loans have traditionally been a strong source of revenue for banking firms in US and worldwide. Therefore, the management would see sense in reducing cost of lending to the clients to attract large pool of clients and benefit in the long run (Barry and Joel, 2003).