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With the Mexican debt agreement in his pocket, Reed was looking like a banker statesman. He was spending more time in the big think department, meeting and greeting foreign leaders, and in Capitol Hill corridors. In July 13, 1989 testimony before the Senate Banking Committee, for example, he called for an overhaul of the U.S. financial system, including discarding boundaries between commercial and investment banking, eliminating geographic barriers to expansion, and integrating the savings and loan and insurance industries with commercial banking.

But Reed was nervous. He couldn't quite put his finger on it, but that summer he began to have nagging doubts about what he called ""Small's world,'' the institutional and corporate business run by Lawrence Small. This was a goodly chunk of Citicorp, and it included the bank's surging commercial real estate portfolio.

""I had sensed that something wasn't right,'' Reed said later. While traveling in Venezuela--Reed typically traveled in Latin America in August because, he said, no work gets done that month in North America--he found himself trading nasty ""CitiMail'' messages with Small.

The economy had slowed down, but, said Reed, ""the business was not performing the way people said it was. I didn't sense that they properly understood what was happening or could work it.'' And he was becoming concerned, somewhat belatedly, that Citi, as he told U.S. Banker of May 1989, was ""getting unduly transaction oriented.''

Besides the numbers cranked out by the accounting department, Citibank's faltering performance was becoming obvious in the marketplace--to the point where it even disrupted the markets. Just how inept Citibank was in the merger and acquisition game became clear in October 1989, when Citibank and Chase failed to make good on a promise to assemble $3 billion for a buyout of UAL Corp., parent of United Airlines. When the staggering $300-per-share bid fell through, UAL shares plummeted by almost $57 a share, closing at $222.875 a share. Citicorp shares dropped $5.50, triggering a 190-point dive in the Dow. Some Wall Streeters believed that the collapsed deal resulted from the troubles Campeau's faltering Federated and Allied Department stores were having making their junk bond payments. Just six months earlier, Citibank celebrated its dubious success in getting back a loan to Campeau won by Security Pacific in 1987, a refinancing of Citibank's and Manny Hanny's original 1986 loan. Takeover stocks and junk bonds were dealt a body blow from which they wouldn't recover for years. Fred Bradley, Citibank's own top airline lender, wasn't involved in the deal. He and Wriston were opposed to leveraged buyouts of airlines. ""I felt there were problems. It was a blessing that UAL didn't work,'' Bradley said.

Over Christmas, Reed took his budgets and printouts to his Jamaican hideaway. Reed's visits there caused considerable consternation among his colleagues. To get to his home from the airport, he had to travel through one of the island's worst slums. After putting up much resistance, Reed finally accepted a security contingency plan that would take effect if civil strife erupted while he was in residence. But now he was more worried about his numbers. As he worked ten hours a day on them, he wasn't happy with what he was seeing. Small, meanwhile, had flown to Australia to meet with customers.

By year end, the writing was on the wall. For 1989, Citibank would earn a mere $498 million, or $1.16 a share, roughly a fourth of the previous year's earnings. Bad as things were, Reed could thank heaven and Governor Bill Janklow for the consumer business, which was responsible for $800 million, or 43 percent, of operating earnings.

Over lunch on their return, Reed told Small bluntly, ""I want to pull you out of your job.'' Reed appointed consumer executive Richard Braddock president and demoted Small, who had run an empire of 38,000, to vice chairman and chairman of the executive committee, with one secretary reporting to him. Outwardly, Small took the move in stride. As one former colleague put it, ""Larry is the consummate actor. He said, "This is terrific. It frees me up to focus on customers.' ''

Wriston was one of many who criticized Reed for not firing Small. ""Hey, Walt, I take your criticism,'' Reed told him. ""You're correct. But let me tell you something. I wasn't born knowing how to manage. I learned a lot of it at Citibank. I learned it watching you, Bill [Spencer], and others.'' He felt Wriston didn't give him credit for removing Small from his job early. But as it turned out, it was not early enough. Reed would say that what he hadn't realized was that Small ""never looked at the business. He only looked at the process. He said, "If you fail the credit audit I'm going to fire you.' But he never looked at the credits.''

Citicorp's emerging real estate and LBO troubles drove home to Reed the dangers of confusing style with results. Small, of course, was the quintessential well-organized ""process manager.'' ""Just because guys have neat desks, lots of reviews and numbers, doesn't mean they will necessarily do a good job,'' Reed said. Citibank's last real banker, Reed now realized, was his mentor, Bill Spencer.

Of Small, he said that ""it wasn't that he saw a [risk] and took the risk. He didn't see it.'' Years later Reed said, ""All of us would say Larry is risk-averse, yet he produced a lot of risks.''

Demoting Small was hard, Reed said, ""because Larry is a friend of mine. I've lost that friendship.'' Reed would say that he admired a lot of Small's qualities, ""but from a professional point of view he turns out to be flawed. I hate to say it, but it's true.''

""I assumed,'' Reed said, ""when we're paying guys $1 million a year you assume they know what the fuck [they're] doing.''

Small would later say that one of the intellectual attributes he admired most in Moore and Wriston was their skill in ""pattern recognition.'' Moore once said that one of the most important skills is to ""recognize the same girl with different clothes.'' Unfortunately, Small, at least in Reed's view, did not share that ability. About a year later, Small left to become president and chief operating officer of the Federal National Mortgage Association (Fannie Mae), the quasi-government agency that buys mortgages and resells them as securities.

In late 1989, as Reed was stewing over his numbers in Jamaica, the real estate market took another blow. The ""Massachusetts miracle'' was going the way of the ""Brazilian miracle.'' Regulators stormed into the Bank of New England, which had gone hog wild making real estate loans. Days before Christmas, its aggressive chairman, Walter Connolly, was forced to resign, and the bank later posted a staggering $1.2 billion quarterly loss. Unloading every asset it could, it sold its credit-card operation to Citicorp for $828 million. Under the gun for their belated handling of BNE, regulators came down like gangbusters on institutions throughout the country, virtually cutting off bank credit for real estate transactions. ""That just killed the market,'' said Reed. ""From then on you couldn't sell buildings for love or money.'' If the credit crunch and the recession that it triggered needed a starting date, the 1989 examination of Bank of New England was it. Reed would later describe the downturn as a ""regulatory recession.'' When the government finally seized BNE and two banking affiliates a year later in a $2.3 billion rescue, BNE was so far gone that the ""rescue'' was merely an afterthought.

Ironically, in a rambling speech to financial leaders at the New York Economic Club on January 30, 1990, Reed said he believed that one of the roles of banks in society was to absorb shocks. Citibank would now begin to absorb them to the point of fracture. In a matter of weeks, Citicorp's perception of its real estate portfolio swung 180 degrees, according to insiders. In February 1990, one top real estate lender delivered a presentation to the board that pointed up some problems. ""It was not as good as we would like it, but not as bad as it could be,'' said a former officer. Ten days later, he said, write-offs of $100 million seemed to show up out of nowhere. The auditors and review process had missed the problem. ""John was not thrilled,'' the officer said. The lack of a real-time portfolio information system was now obvious for all to see. Incredibly, said the officer, ""nobody was interested in the fact that real estate outstandings were $13 billion.'' The idea, he said, ""was to put on everything you can to make good money and it will sort itself out.''

That was just the beginning. In the first quarter of 1990, the U.S. real estate market plunged. Nearly overnight, the impact of the 1986 tax changes and overbuilding, in part triggered by overlending by now-defunct thrift institutions, came home to roost. The Japanese, who had helped hype the market in the first place, now retreated en masse. The Japanese banks, however, would soon have their own problems. They merely disguised their losses with an accounting system that made New York City's lucid in comparison. ""After the comptroller said what he said, forget it,'' Reed said in a 1991 interview. ""Liquidity evaporated and hasn't come back since.'' For Reed, the early years of the decade of the 1990s were to be a black hole.

Citi's problems were heavily concentrated: domestic real estate, Australia, Brazil, and highly leveraged transactions. The biggest chunk of the leveraged deals--16 percent--were in media and entertainment. By 1991, Citibank had made more than $13 billion in commercial real estate loans, more than a third in the western United States. Nearly 43 percent of them were now nonperforming. Citibank had lent up to 80 percent or more of the value of the properties, putting Citibank's investment underwater when values plunged 40 percent or more. Residential mortgages were turning sour too.

In early 1990, Citicorp debt was downgraded by the major rating agencies, and by 1991 some of it had been reduced to junk bond status. Ratings are not as important in consumer banking as they are in corporate banking. Individual depositors generally don't know a bank's credit rating, and don't care. But the rating downgrades cost Citibank dearly. Not only did they increase the cost of purchased money, but they also hurt its ability to execute certain capital markets transactions, such as swaps.

In the first quarter of 1990, earnings fell 56 percent and the loan loss provision surged 80 percent. At the April 1990 annual meeting, Reed declared the real estate market ""frozen,'' noting that ""typically the down cycle in real estate lasts three years.'' Things were getting tight all over. Arizona, where Citi had bought a bank in 1986, was a ""black hole,'' Reed conceded.

At a later annual meeting, one testy shareholder asked Reed how he had lent so much on real estate. ""We made a mistake,'' Reed said. ""If you make two mistakes they send you back a grade,'' the shareholder scowled.

As late as 1989, Citibank was still lending heavily to real estate developers. For example, in Atlanta it underwrote One Peachtree Center, developed by builder John Portman. But by midyear 1990, Donald Trump was on the skids. Trump had started out as a good customer. But in the opinion of former Citibank officers, he, like other developers, got carried away. ""We did one deal too many with people who were okay,'' shrugged a former officer. With $2 billion in bank debt, Trump's lenders moved to restructure his empire, including his new Taj Mahal casino in Atlantic City, which had opened in April 1990 with great fanfare, but which quickly proved disappointing. Bankers had bought Trump's pitch that the ""magic'' of his name would enhance the value of his properties, so that they could dispense with the traditional credit analysis. The Donald, one banker told the Wall Street Journal, ""will have to trim the fat: get rid of the boat, the mansions, the helicopter.'' But Trump got over this hump by persuading the banks to extend a new loan to pay interest, enabling him to hold on to all his assets.

Trump's problems paled alongside those of his Canadian counterparts, the Reichmann brothers. Through vast, ambitious projects in the United States and the United Kingdom, their Olympia & York had amassed debts of nearly $20 billion. It was the largest commercial landlord in the United States; the restructuring, akin in complexity to that of a Third World country, was the largest of any private company in history. Citibank alone was owed close to $500 million. By the spring of 1992, the Canadian parent had filed for bankruptcy, and later Canary Wharf entered the more draconian British equivalent.

Australia once again was a disaster, proof positive that Citibank had no institutional memory. Over a two-year period, Citibank racked up about $1.2 billion in loans to high-flying real estate developers and other promoters, most of which would ultimately have to be written off. ""In Australia, if there's a fool, it's us,'' said former Citibanker William Heron. Highly leveraged transactions, which included LBOs, also suffered, though at the end of the day they were a pimple compared with the real estate cancer. In January 1990, Campeau's Allied and Federated units, which owed Citibank $288 million, filed for bankruptcy. Incredibly, Citi had backed Campeau up to nine months before everything unraveled.

If there was any consolation, Citi--thanks to Wriston's intervention--avoided major involvement in the troubles of corpulent British media magnate Robert Maxwell. Wriston had a passing acquaintance with Maxwell as a director of Reuters. When Wriston came aboard, Reuters had two classes of stock, one of which was owned by the British press association, which had designated Maxwell a director. Wriston didn't like the idea that a company chairman couldn't fully control who got elected to his board. So he urged Reuters to buy out the press association's shares. At one point, Maxwell was censured by the Reuters board and the London Stock Exchange for illegal trading.

Before heading home from a trip to London, Wriston stopped by Citibank's main branch in London to warn it about Maxwell. ""Be very careful. Don't do anything,'' he told branch officials. In early 1991, Maxwell was looking for financing to buy the stumbling New York Daily News, which he agreed to do in March. Recalling Wriston's earlier visit, the branch phoned him to get his view on the deal. ""I told them some other things and they stayed away from it,'' Wriston said. In November 1991, as Maxwell's empire was being exposed as a shell game, he was found drowned in the Mediterranean near his yacht, an apparent suicide.

Unlike Wriston, Reed never really developed that kind of external or internal intelligence network. Few people were daring enough to bring him bad news and, colleagues said, he never took it very well. The only ones who came close to giving it, they said, were Farley, the Wriston holdover, and Paul Collins. But Reed had dispatched Farley to the West Coast, and Collins to London.

In September 1990 it was Chase's turn to shock Citi. When Chase announced that it would add $650 million to its reserve for loan losses, mostly for bad real estate loans, the market went wild. That put more pressure on Reed to raise more capital. ""The Chase announcement took us totally by surprise,'' he said.

Reed insisted that Citibank's portfolio was really no better or worse than anybody else's. But Citibank was not supposed to be like anybody else. It was supposed to be special. Now the only bank that could be considered solid gold was J. P. Morgan, which had made few real estate loans at all.

""The safeguards were overridden,'' one former officer said. ""People didn't sound warnings. In the old days, we had a lot of people watching the patient, but the people and the equipment disappeared.''

""The credit process we had was not perfect, but it worked,'' Wriston said. ""Somehow it broke down. I don't know why. There was no George Scott around,'' Wriston remembered. Credit policy chief Lawrence Glenn had enjoyed a reputation for being pretty tough. ""I thought so,'' Wriston said. Before Citibank dropped like a rock, Wriston said, ""I have nothing but admiration for Johnny. He does a lot of things differently than I do, and that, after all, is why the hell you change managers.

This fellow has a remarkable brain and he's growing every day. It is really wonderful to watch.

I can't stand these guys who sit around and say my successor is screwing up.''

But bad loans weren't Reed's only problem.

That was apparent to him late one afternoon in December 1990, when he and president Rick Braddock were meeting in the sanctity of Reed's private library. As they talked, a steady stream of black Lincoln Town Cars pulled up to the curb or double-parked in front of the building. In the heydey of the 1980s, such a motorcade usually signaled an important meeting of bankers and lawyers over a billion-dollar leveraged buyout.

""Guess we're doing some business,'' Reed remarked hopefully. Braddock knew better. ""Bet we're not,'' he replied. The two men glared at each other, and Reed quickly got the message. Without putting on a coat, he went outside to ask each driver who had ordered the cars. Each driver confirmed Braddock's suspicion. Citicorp employees, from officers to secretaries, were routinely ordering the limousines, intended only for those who worked late into the evening, to chauffeur them home in the late afternoon and early evening. Citi had grown fat and dumb. And now it was not so happy.

Even as Citibank's difficulties worsened, Reed was confident that as long as the economy grew at all Citi would be able to earn its way out of them. But if, as some predicted, the recession deepened to a negative 3 percent growth, Citibank would be in dire straits. If that happened, Reed would be forced to consider selling his crown jewels--even the credit-card business.

He was not pleased with the Bush administration's economic policy. The problem was that there was none. At one point, as the recession took a turn for the worse, Reed spent a weekend on the phone talking to Treasury secretary Brady and other Washington officials. ""Let me tell you, they heard the riot act,'' he said. ""I haven't gone down and yelled and screamed,'' he said at the time. ""Maybe I should.''

By 1991, Wriston was also fed up with the Bush administration and its economic non-policy--and not just because Bush didn't play tennis with him anymore. ""What is frightening to me is I don't think the current incumbent [Bush] appears to have any fixed values other than loving his grandchildren. I don't see any direction in economic policy,'' he said in 1992.

But Citi and the banks did have a friend at the Fed. As the economy screeched to a halt, interest rates, with a push from the central bank, plummeted to their lowest levels in decades. And because the cost of money plunged faster than loan rates, bank loan spreads grew fatter.

No one in Washington was as disliked at 399 Park as Representative John Dingell, who had flogged Citi over the Edwards affair. In mid-1991, he delivered the unkindest and most dangerous cut of all. He declared at hearings that Citibank was ""technically insolvent'' and ""struggling to survive.'' When Dingell made his comment, Reed and his colleagues ""went bananas,'' said a former senior officer. FDIC chairman L. William Seidman rode to Citi's defense. Of Dingell, Reed said, ""I assume he's trying to assert an interest in legislation, and the best way to do it was to make an outrageous statement that can attract attention.''

A year later without mentioning Citi by name, erstwhile presidential candidate Ross Perot, in an interview with ABC's Peter Jennings, described the bank as insolvent. It turned out, as reported in the New York Times, that Perot had been shorting Citi stock [selling borrowed shares on the expectation that the price would fall]. As if the charges of insolvency by a loose-lipped Representative Dingell weren't enough, Reed also had to contend with charges of infidelity in the gossip columns. Sally Reed had filed for a divorce in late 1990 and Reed moved out of their home in Greenwich shortly thereafter. Then, on June 12, 1991, Daily News gossip columnist Richard Johnson reported that Reed was having an affair with Cynthia McCarthy, a married stewardess on the Citicorp jet. Wriston was horror-stricken. On the day the article appeared, Wriston told a friend, ""This is a terrible day for Citibank.''

""He's your boy,'' the friend said.

Wriston replied, ""He's not my boy anymore.''

Wriston, in a tough admission, told friends he ""goofed'' in picking Reed.

It didn't take long for Wall Street traders to start the humor mill turning. In one wisecrack that quickly made the rounds, the captain comes on the loudspeaker and says, ""Would the stewardess please return to an upright position before landing.''

After the Daily News article appeared, Reed told colleagues at a meeting that he planned to cut down on his foreign travel. Reed had made the statement with a straight face. But everyone else bit his lip.

At a board meeting following publication of the article, Reed started to explain his personal circumstances to the board. ""They stopped me,'' he said, ""and said, "forget it.' '' He said he assumed that Wriston had explained his domestic situation to the board before they elected him chairman.

Reed acknowledged that his marital problems ""consumed a lot of my energy. It didn't make it impossible to do my job. But it was a distraction.'' Worse still, it hurt his relationship with his children, he said.

By now, many were speculating that the board would demand his resignation, if not for his personal indiscretions, then for his performance as chairman. Hardly a week went by without more bad news and fresh rumors that Reed's days were numbered. Some began to question whether Citibank was simply too big for one person to run, and whether it should be split up. Directors confided to friends that one of the problems they faced as they pondered John Reed's future was that there were few alternatives to Reed left inside the bank. Those who were responsible for the damage had been fired. Others had left on their own. And there were few non-Citibankers in the United States who might be able to wrap their arms around Citicorp fast enough to save it. Reed himself wisecracked, according to one executive, that he kept his job because the board ""prefers the devil you know to the devil you don't.'' Another thing working in Reed's favor was that by now more than half of the outside directors had been elected on his recommendation.

Asked at the 1992 annual meeting if he would consider resigning, Reed said, ""If there was a period of time when I couldn't get the job done I suspect the board will look for new management. This management is firmly determined to get the job done in 1992.'' Reed managed to convince a nervous board that he would turn things around.

Some even speculated that Paul Volcker would be installed as chairman, or that Wriston would be hauled out of retirement. That wasn't about to happen, but Wriston was no longer keeping his nose out of Citicorp's affairs entirely. As Reed said at the time, ""I see more of him [Wriston] recently because he really is worried about what we're going through.''

Stillman Rockefeller, who at eighty-eight still rode the train in from Greenwich to his office several times a week, summed the situation up tersely in a brief sidewalk interview. Rockefeller blamed Wriston for picking Reed. ""He [Wriston] sure made a mess of things.''

Yet even as Citibank was suffering from its problems, it did not relinquish its role as a source of liquidity for other troubled firms. One was Salomon Brothers, whose CFO was Donald Howard, late of Citicorp. ""Howard,'' said Reed at the time, ""must be running around making sure those who lend continue to lend.'' That included his former employer. ""We keep everybody afloat. It's part of the process,'' Reed said.

Reed sometimes exacerbated his own problems with his bluntness. In a speech to Chicago business executives that was reported in the Wall Street Journal of September 23, 1991, he declared that real estate write-offs would continue longer than he had expected. He added that values would plummet 30 percent before they stabilized. That statement by the nation's largest real estate lender, experts said later, itself caused values to decline. Reed felt one of his major weaknesses was his inability to present himself to the outside world in a sophisticated way, for which he was widely criticized inside the bank. His speech in Chicago may have been one such example.

When the bad news rained, it poured. In the third quarter of 1991, Citicorp disclosed a loss of $885 million. After having already slashed the dividend--Citicorp's sacred cash cow--Reed was now forced to take the drastic step of eliminating it entirely. Citi could no longer boast that it had paid dividends without interruption since 1813. Reed now owned 500,000 shares himself, and was using the dividends to pay off the loans he took out to buy them. So these measures squeezed Reed personally. ""I'm sensitive to that. I'm embarrassed by that,'' he told analysts. Half of the deficit resulted from a write-down of the ill-fated Quotron acquisition. By now, the Wall Street firms were ripping out their Quotron machines and replacing them with the box of choice, the Bloomberg terminal. By 1992, just a handful of firms still used the Quotron.

In November 1991, Reed canned senior executives of a credit-card unit for inflating revenues. And in December, more unfounded rumors about new Citicorp troubles and Reed's impending resignation sent Citi stock plummeting to $8.63 a share, the lowest level since the 1960s. That month, the cover of Institutional Investor depicted Citibank's treasured ""Credit Doctrine for Lending Officers'' wrapped around a fish.

Citibank may not have been insolvent, but its condition was clearly a cause for alarm. In August 1992, it was forced to disclose that regulators had demanded that it sign a ""memo of understanding''--an ""MOU'' in regulators' shorthand--admitting that its difficulties were critical enough to require intensive regulatory supervision. Examiners, one Citibank officer said, regularly took over the boardroom to go through the loan portfolio piece by piece. In fact, Reed admitted later, Citi came ""very close'' to the abyss in December 1991, when the comptroller of ""the Currency declined to sign off on Citi's reserve levels. But Citi was deemed ""too big to fail.''

In the thick of the S & L crisis, Wriston was dumbfounded at how Lincoln Savings, one of the costliest thrift failures of them all, was able to corral five U.S. senators to pressure regulators not to take action against it. ""I don't think the commercial banking business could marshal one U.S. senator to talk to any one of the regulators.''

One humiliation was heaped on top of another. Regulators ordered Citi to lower second-quarter 1992 earnings by $28 million, saying it exaggerated the value of its mortgage-servicing business. Chastising Citi for its sloppy lending practices, the regulators asserted that nearly 13 percent of its residential mortgage loans were delinquent. As Citi had done sixteen years before in the problem bank episode, it contested the regulators' findings, saying they were filled with errors. The number was only 5 percent, Citi insisted. Whatever it was, Braddock, though well-regarded as a manager, was ultimately responsible, and took the fall, adding to Reed's reputation as Citicorp's resident ""serial killer.'' In Reed's view, the mortgage debacle was the ""most dangerous'' point for Citi. ""It was a question of their [the regulators'] feeling that we had serious control problems.''

If there was one silver lining, it was that the memo of understanding essentially blocked Citicorp from making more bad acquisitions even if it had wanted to.

Reed seemed to take the heat well, though he complained that ""people talk about Citicorp as if we were the only people in America with a troubled real estate portfolio. No one is writing articles that [Tom] Labrecque is going to get fired from Chase, [Walter] Shipley from Chemical, [John] McGillicuddy from Manufacturers, or [Robert] Smith from Security Pacific.'' To be sure, much of the U.S. banking industry was in the same sinking boat.

Amid the criticism, Reed at least was aided by the knowledge that ""never in my career did anybody think I was doing anything right.'' When he ran operations, ""everybody said, "God, he's tearing up the operating group. When I was running the consumer business, it was [considered] a big mistake.''

Reed said the stress level he felt during Citicorp's crisis was ""about comparable'' to what he had endured during the dark days of the consumer business. Then, he said, ""I was less in charge of things. Now at least I'm very much in charge.

Being in charge is better in terms of stress. You can sort of look in the mirror and say, "Hey Reed, do what you think is right.' The only person I look to is myself.''

And he added, ""Despite the fact that the whole world thinks I'm an idiot my collapsing under pressure is not likely.''

There were few bright spots in this gloomy landscape. One of them was the consumer business in general and credit cards in particular.

For all its other woes, Citibank was now the only global consumer bank and was making solid profits there. The beauty of the international consumer business is that it could generate local currency deposits, which could be lent to local customers instead of dollars. Said one former top Citibanker, ""Wriston understood that.

One of the reasons he wanted to build the international consumer business was so we wouldn't have to make cross-border loans to do business with customers in these countries.''

""The difference between Citibank and the others,'' said Wriston, ""is we have this huge branch network in Latin America that makes money year in, year out. No other financial institution has that network. We've been remitting profits from Brazil every year through this whole mess. That's what everybody who beats us up over cross-border doesn't realize, and we're not about to put it on the broad tape either.''

Citibank's goal was to introduce its ""Citi-One'' account, with local variations, at branches throughout the world and to link up its ATMs all over the world. That would enable a New York customer to obtain cash and information on his account in Munich or Athens or Hong Kong just as he did at home.

Citi's consumer banks in Germany and Spain were big successes. In Spain, Citi had rehabilitated a failing bank it bought from the Spanish government and renamed it Citibank Espana. Following in the tradition established by Wriston and George Moore, it revolutionized consumer banking in Spain by providing conveniences customers had never known before, such as granting car loans in forty-eight hours instead of two months. In early 1991, Reed said the California savings unit was profitable and declared that Citicorp Savings in Chicago was ""getting respectable.'' Another saving grace for Citicorp was its global infrastructure. Bad as its loan portfolio was, virtually every multinational corporation had to deal with Citicorp. It was the market maker in foreign exchange, which covered up a multitude of losses. In 1992, foreign exchange trading revenues of more than $1 billion represented over 100 percent of earnings.

One treasury officer of a multinational company recalled that even as his company was prudently keeping its balances at Citibank during its crisis to a minimum, it dropped Manufacturers Hanover and Chemical Bank as paying agents, saving $50,000 a year, because of Citibank's ability to quickly disburse and clear checks in any currency, virtually anywhere in the world. Overseas, Citibank officers get ""immediate access,'' he said, to senior company officials.

By now, there was plenty of blame to go around. While Reed assumed most of it himself, others didn't get off easily either.

Reed would later blame his institution's decline on the ""quest for profitability.'' No, he insisted, it was not the LDC problem that caused his corporate bankers to stretch, but rather the success of the consumer business. ""I think the people in the corporate business felt that to be credible internally they had to be as important to the company as the consumer business. When the consumer business said they were going to make $1 billion a year, the corporate guys felt they had to [as well].''

""It was a crazy era,'' Reed said. ""If you had any assets and they weren't fully leveraged, you weren't doing your job as a manager.''

""We've had this underlying variable imposed on us called taking reserves for cross-border loans.'' But Reed admitted that the problems of Citicorp were not Wriston's. ""I can't lay the blame on a guy who retired seven years ago,'' Reed said in mid-1991. By the mid-1990s, cross border, real estate, and LBO's had cost Citicorp upward of $9 billion in write-offs alone, enough, in theory at least, to have bought Chase Manhattan, with Wells Fargo thrown in for good measure (based on year-end 1992 valuations). Though Reed took the blame for the real estate and LBO disasters, he did point out that some of those who oversaw them were discovered and appointed to their jobs by his predecessor. Chief credit officer Lawrence Glenn, for example, was named to that post by Wriston.

Reed now regretted not having wider banking experience and getting more involved in the corporate business, but added that delegation was the Citibank tradition.

""I assumed the people running it knew what they were doing, but it turned out I was wrong, for which I will never forgive myself. There was a whole set of folks who let themselves, the institution, me down. [It was] just incompetence in every sense of the word.'' Meanwhile, ""the corporate guys are feeling bad about themselves, so they run around saying Reed doesn't love them.'' Not so, said Reed. His problem with them was that they brought home a bad report card.

Just as it had done in lending to the LDCs, Citibank ignored what Reed called the ""macro-externalities'' that led to the collapse of the real estate market. Still, he had no regrets about disbanding the economics department. ""Line management was persuasive in saying, "Hey, we know what we're doing.' The economics department wouldn't have stopped that.''

Reed concluded that the problem with the loan portfolio was not the structure of individual deals but the portfolio concentrations. ""We never have had a focus on portfolio management,'' Reed said. ""We should have.''

Still, the LDC debt crisis was clearly a distraction. ""I was busy with cross-border,'' Reed said, ""where there were obvious indications of need. I had a hell of a lot of learning to do, but I must say it took an awful lot of my time. To good end.''

Countering charges that he got too involved in the LDC crisis, Reed insisted that his personal involvement was essential, because only he could phone Volcker or Mexican president Salinas. ""Putting together the Mexican deal certainly required personal intervention at the chairman level of all the major lending banks.''

Wriston, Reed said, would feel that he had done a ""crappy job'' in terms of public leadership. ""He's correct. Walt was very good at positioning himself and the company.'' Added Reed, ""I'm going to have to add that to my collection of tricks.''

Humbled by his troubles, Reed acknowledged that, twenty years after he earned his reputation as a brash young technocrat, ""I'm not quite so brash. I don't think of the world as simply as I did then.''

When a banker's world starts caving in, the first reaction is to slash, sell, and fire. Reed, said a former Citibank officer, ""gave everybody a dull hatchet and said go out and hack.'' To save their own jobs, they eliminated those of thousands of others. In 1990, Reed began by firing 3,600 employees. That wave was followed in December 1990 by another 4,400. Reed wasn't kidding when he told U.S. Banker of May 1989 that ""I'm a talker.'' He casually mentioned to one multinational customer over dinner at the Four Seasons that 20,000 people would be let go before the bloodletting ended, not the 9,000 or so already announced, according to one former senior officer.

Citibankers had always been assertive and sure of themselves. Now they were plagued by self-doubt and uncertainty about the survival of their institution. Morale sank to an all-time low. Citibank's internal competition may have worked when business was growing. As Citibank faltered and jobs were eliminated, the backstabbing turned vicious. People who were once friends scrambled to save their jobs. Said one observer, ""It was like people trying to get out of a building in a fire.''

""The covenant of trust is gone,'' one officer said at the time. Citicorp was paralyzed, and the atmosphere of gloom and doom wasn't lost on corporate customers. ""CFOs called asking what's going on. Customers have really been battered around on this one,'' said a former officer.

By 1991, Reed had concluded he had to cut a staggering $1.5 billion of expenses out of Citicorp. As he told analysts in January 1991, ""All large companies get sloppy, and we are no exception.'' Watching the town cars from his library window ""crystallized'' Reed's thinking about expenses, he said later.

In addition to limos, every expense item was now subject to scrutiny. One night, Reed noticed that all the lights were still on at Citicorp's new high-rise operations center across the river in Queens. When he called to ask why, he was told they were needed for the cleaning people.

But Reed needed to do much more than turn the lights out. After years of opposing (for the most part successfully) Fed chairman Arthur Burns's efforts to force banks like his to raise more capital, Wriston took special satisfaction from an unusual admission Burns made a couple of years after Wriston retired. Over dinner at a financial conference in Cannes, France, where they were on a panel together, Burns said, ""You know, Walter, you sure turned out to be right. You really have to earn money to sell equity.''

Wriston was startled and pleased. When he recovered, he said, ""This is a historic occasion. I wish I could immortalize it with something,'' Wriston said. But Burns's admission would be of little consolation a few years later to John Reed. Reed would learn that while you have to earn money to sell equity, you also need equity to stay alive.

Thanks to the debt crisis, bank regulators now had the ammunition they needed to require global bank capital standards. The regulators in the eighties devised--and in mid-1988 the Fed approved--a set of capital ratios tied to the risks of assets on banks' books; under this so-called Basle Accord, riskless assets such as Treasuries would not require capital, whereas assets such as commercial real estate loans would call for banks to allocate a certain percentage of capital against them. By the time this effort began in earnest, Wriston no longer had his perch as Citicorp chairman to speak out against them. And just a year before these rules were to go into effect at the end of 1992, Citicorp failed to meet them. Reed now needed to boost capital by $4 billion to $5 billion.

Reed, unlike Wriston, did believe that banks needed capital. Turning his back on the Wriston era, he declared that ""the departure for us is embracing the notion of being strongly capitalized. We had felt we could run with thin capital. For years, the strength of the company was its diversification of earnings. That's clearly not enough,'' he said.

But Citibank was troubled by the new global capital standards. Under these rules, preferred stock that didn't carry a fixed dividend rate would no longer be accepted as equity. Citibank thought that was ridiculous, and lobbied the regulators to include it--to no avail, according to former chief financial officer Don Howard. With the stroke of a pen, Citibank was deprived of billions of life-sustaining equity capital.

In a February 7, 1992, Wall Street Journal Op-Ed article, Wriston complained that the regulators constantly changed the capital rules, to the point where capital adequacy ""has become a race with no finish line.'' While ""defining away'' the preferred stock, Wriston wrote, regulators redefined assets, assigning a riskless label to government securities. That allowed the government, he wrote, to finance its huge debt by selling the securities to the banks, which would not have to allocate capital to them.

So Citicorp scrounged the world for capital. Someone asked Reed if he planned to sell the rest of its interest in Citicorp Center. ""Are you kidding?'' Reed replied. ""You can't give it away.''

Perhaps the most reliable treasure trove was the venture capital unit headed by Oklahoman Bill Comfort, who reputedly drew a bigger paycheck than Reed for the success of his operation. Inside Citi, Comfort was untouchable. He often wore golfing garb to work and relaxed in his spacious office by practicing his putting. From 1985 until 1992, his unit had posted real gains of about $900 million and unrealized gains of about $600 million, Citicorp sources said. Whenever Reed got in a jam, one of the people he turned to for some nonrecurring earnings was Bill Comfort.

One eagerly welcomed investor emerged from Saudi Arabia, proof positive of Wriston's argument that OPEC surpluses didn't disappear into the desert sands. Prince al-Waleed bin Talal, now thirty-five, had good feelings about Citibank, having received a loan from Citi in 1979. He had a long-standing relationship with the Swiss private banking office of Citibank, and for three years had been contemplating an investment. The deal gave him an 11 percent dividend on convertible preferred stock and the right to convert those shares to common equity once the price per share hit $16. That would give him a 4.9 percent stake and make him Citicorp's single largest holder.

Shortly after meeting the prince for the first time, Reed said, ""He, like all investors, is interested in making money. I just wanted to make sure he understood what the game plan is and how we're going to manage the place. He's going to make a lot of money. I wish I had $590 million earning 11 percent while I watch the price of the stock.''

In 1992, Citicorp gave its preferred shareholders the opportunity to exchange their shares for common at a higher price. And it later offered common shareholders the chance to acquire more stock at a 2.5 percent discount from the market price.

Another device that helped save Citicorp, and which Citicorp helped pioneer, was asset securitization. Like mortgage securitization, this new technique involved packaging assets, such as credit-card receivables, and selling them as securities to investors instead of keeping them on the books. Without securitization, Citi could never have expanded its consumer business. In March 1990, for example, Citibank sold $1.4 billion of consumer receivables packaged as securities, the largest such transaction in the three years since the market started.

Compounding Reed's problems was a regulatory push for banks to use mark-to-market accounting, the issue Wriston so successfully deflected during his entire chairmanship. Commercial real estate loans--Citi's Achille's heel--now had to be written down as values dropped. ""It's a crazy concept for a bank. We all benefit from the fact that time is a great healer,'' Reed said. In Reed's view, mark-to-market was just one example of the fact that Wriston ran the bank in a less hostile world, one that was more amenable to being shaped to his liking. The only area in the external world where Reed felt his influence had been felt was in the cross-border debt negotiations.

Wriston continued to try to pin the troubles of the banks on regulation. In a November 12, 1990, Wall Street Journal survey on how troubled banks might recover, he said, ""There are structural problems that have to be fixed.'' Banks needed to be able to expand nationwide. And laws needed to be changed to allow industrial companies to buy more than 9.9 percent of a commercial bank. Wriston proposed allowing cash-rich industrial companies, like drug companies, to buy 49 percent stakes in troubled banks--though he did not name his own. After it recovered, the bank would buy the shares back, enabling the companies to earn a 20 percent return.

When the bank's problems began to snowball, Reed confessed that he was ""overwhelmed by the burden of it. I was dragging my tail.'' In his business or personal life, Reed admitted that he was sometimes less than decisive. He had, for example, spent four years deliberating over what kind of hi-fi to buy until one of his children demanded, ""Stop talking about it and buy it.'' Reed considered himself a builder, not a ""runner.'' And so far he had not done a very good job of ""running.''

Around March 1991, he said, he realized that, as unpleasant as it would be, he would have to pull himself together and bite the bullet to rebuild the bank--not just dart from one crisis to the other.

""I went from being an embattled executive to being a person driven to make some very fundamental transformations in the company.'' Reed set out to fix the broken Citicorp credit culture, the destructive internal competitiveness, and spendthrift attitudes. He was now determined that by 1993, Citibank would be stronger, better capitalized, and more focused.

When John sees a problem, a former colleague said admiringly, ""He says, "I'll fix it.' ''

As he had done with the LDC crisis, Reed in mid-1991 announced that he was taking personal charge of real estate lending and corporate banking in Australia, removing those activities from the control of Michael Callen. With real estate values down an estimated 30 percent from their highs, in October 1991 Reed tapped Robert A. McCormack, a veteran of the Third World reschedulings, to be the Bill Rhodes of the real estate debacle. Instead of taking a fire sale approach that would cause more losses, McCormack was to take a long-term view of the market. And Reed later set up a dozen task forces to work on such problems as bad assets and heavy expenses. Then in early 1992, to add some luster to Citicorp's tarnished reputation, he named director Onno Ruding, a highly respected former Netherlands finance minister, to vice chairman for corporate banking.

First and foremost, Reed had to repair the damage to the bank's risk-management systems, including its credit culture and methods for monitoring loans. As the portfolio grew, Citibank had not felt it needed a system for monitoring loans and establishing exposure limits by industry and location. Now, humbly, it set up a system to do just that. Reed was determined to give credit policy officers a more ""independent'' check-and-balance role than they had enjoyed in the past, and to focus on market risk as well as credit risk.

Reed now recognized that decentralization a la Wriston had its drawbacks. Reed aimed his scalpel at layers of bureaucratic flab built up since the McKinsey reorganization, and at the bank's overemphasis on process over substance. In early 1991, Reed said that he planned to reduce senior management to twenty-one from thirty-four. The management structure would be thinned down, ""starting with me,'' he said. Administrators, auditors, controllers, human resources specialists, and especially lawyers would be let go or their functions consolidated, while people who dealt with customers would remain. By cutting five executive vice presidents with geographic responsibility in different parts of the world, Reed said, he eliminated 600 staff members associated with each of them. ""I can find no difference in our ability to run the business internationally. I have one guy in New York with international responsibility and he has nine guys in the field.'' Of the approximately 17,000 people Reed had put on the street by mid-1991, most of them, he said, were ""fat.''

Bank officers had gotten to the point where they couldn't write a letter to a customer without checking it with a Shearman & Sterling or in-house attorney. Reed revealed that the chairman's letter for the annual report, normally read by six people, including lawyers, would now be written by him and reviewed by just one other person. ""It might not be as smooth,'' he quipped. But it would surely cost a lot less.

Reed also eliminated monthly budget meetings, saying that they had become ""show and tell as opposed to substantive discussions.''

No one believed in leverage more than Wriston, but Citicorp had failed to use its size to its full advantage. It had always allowed each business manager to exert near-total control over every activity, including purchasing. At long last, purchasing was centralized so that Citibank could get better deals on everything from phone calls to travel and entertainment. Citibank also stopped offering business managers what one analyst called ""hardware and software a la carte.''

Stunned by his setbacks, Reed set out to change the sociology and attitudes of Citibank and Citibankers. He reevaluated, for example, the criteria he used for choosing top people. In a videotaped presentation, Reed lamented the lack of wisdom among managers and cited Theobald as one manager who possessed it. Now, Reed ordered, managers would be evaluated for how they treated their people as well as their bottom-line performance.

In mid-1991, Reed boasted, ""I now figure I can run the whole fucking place. I have to and I will. I'm just as good a corporate banker as any of those corporate bankers, not because I know anything about banking but because I know enough about business.''

As Citibank's problems took hold, Reed looked to 1993 as the year when he and his institution would begin to come out of the woods. He was right.

""It's now coming back,'' Wriston glowed as the patient showed signs of recovery. ""It's the greatest franchise in the world. Probably no one could have withstood what they've gone through.''

Reed was finally assembling a team that was relatively untainted by the credit debacle. An important new addition was Christopher Steffan, a tough cost-cutter who traded his job as chief financial officer at floundering Eastman Kodak for the same post at Citi.

Reed had worked like the devil to save Citicorp. But he couldn't have succeeded if Fed chairman Alan Greenspan had not been working the monetary levers on behalf of Citi and other beleaguered banks.

By 1993, as bank profits improved and regulators, realizing they had come down too hard on the banks to begin with, started to remove regulatory impediments to bank lending, the credit crunch began to ease.

One of the biggest winners was Prince al-Waleed bin Talal of Saudi Arabia. In mid-1993, he sold 3.457 million shares of Citicorp for $95.5 million, or $27.625 per share, more than doubling his money on that transaction in some two and a half years.

But the Citibank that came back from the dead was a much different Citibank than the one Wriston had retired from or envisioned.

Decentralizing, experimenting, taking big risks, and battling regulators had worked in the optimistic, high-growth era in which Wriston served as chairman. But with Citibank on the defensive, these strategies were luxuries it could no longer afford. Indeed, the Citibank of 1995, some officers say, more closely resembles the conservative bank of Stillman Rockefeller rather than the aggressive one of Walter Wriston. ""We're going back to fundamentals,'' said John Ingraham, the veteran workout man. Accordingly, Reed concluded that Citibank would have to become a more focused place. By 1995, Wriston's five I's'' had been cut to just two or three. ""Information is a disaster, and insurance never went anywhere,'' said Ingraham.

Citibank also threw in the towel on middle market lending and investment banking. ""Major expansion in the U.S. middle market or into broad-based investment banking is not our objective,'' Reed wrote in his 1994 letter to shareholders. If there remains a Wriston legacy, it is that two-thirds of Citibank's earnings were now coming from consumers.

Wriston had, in Reed's opinion, nearly realized Citicorp as a global institution. The global consumer business got its start under Wriston, but became more interconnected under Reed, notably by flipping the ATM switch to allow retail customers to use their Citicards anywhere. Though Reed was convinced that most of Citicorp's future profits would be derived from the consumer, he felt that corporate banking would always be the intellectual cornerstone of the company. ""There are no exciting consumer financial institutions that I know of,'' he said.

Reed wanted to strengthen Citicorp's traditionally weak corporate business in Europe and Japan. He wanted to get technology ""baked into the place,'' in the form of on-line interactive systems where bank ""products'' could be delivered to the customer through computers. In the corporate arena, Citibank's increased globalization was reflected in its financing of the construction of a tower in Germany, the tallest building in Europe, by placing the paper in Japan.

Ironically, in John Reed's newly refocused Citicorp, Wriston's fifth ""I''--insurance--was relegated to a minor role just as Citibank won a major battle for insurance powers. In early 1992, the Supreme Court let stand an appeals court ruling that allowed the bank to circumvent prohibitions against bank underwriting of insurance by doing it through a Delaware banking unit. Now Citibank could sell its own insurance through New York branches, along with mutual funds and annuities.

With fewer ""I's'' to focus on, he could finally focus on himself. On September 2, 1994, in a small, private Chicago ceremony, he married Cynthia McCarthy.


Whenever Citicorp ran into trouble and critics beat up on Wriston for his blunders, Wriston implicitly compared himself and Citibank with baseball greats like Ted Williams and Joe DiMaggio. People can zero in on his mistakes and those of his institution, he said in later years, ""or they can focus on our batting average. One of the things that fascinates me is that if you hit .400 in baseball you're in the Hall of Fame.'' He evidently thought his batting average was a pretty good one.

But a batting average, even though Wriston was prepared to use it to quantify his own performance, is a trite and one-dimensional measure of his life and career. A more meaningful metaphor is the Olympic scoring system, which judges artistic as well as technical merit.

In the banking Olympics, Wriston would probably qualify for a bronze medal on technical merit alone. Judged according to the returns he delivered to shareholders, his performance was better than average for his big-bank peers, but not spectacularly so. Wriston was a good banker, but not the best.

On August 31, 1984, Wriston's last day on the job, Citicorp shares closed at $17.31, compared with $6.75 when he became CEO seventeen years earlier, an increase of 156.5 percent, slightly better than the average 148 percent appreciation for large banks, according to an index compiled by Keefe, Bruyette & Woods, a bank securities firm.*

*If the Wriston era is assumed to have really ended on May 20, 1987, the day after Reed announced his special LDC reserve, the appreciation would be 293.5 percent, slightly below the Keefe big bank average. Measured on annual total return, which includes dividends, Wriston's performance through 1984 and 1987 was 10 percent and 11 percent, respectively.

And by naming a non-banker to take charge of an undercapitalized bank, Wriston set the stage for billions of dollars in losses to shareholders on his successor's watch.

In the artistic merit category--intellectual and industry leadership and innovation, the figure eights and somersaults--Wriston deserves higher marks.

While A. P. Giannini and J. P. Morgan are deservedly in a league of their own for having started great banking institutions from scratch, no banker and institution did more to free the financial services industry and the U.S. economy from the regulatory gridlock of the 1930s than Wriston and Citibank did. In the last half of the twentieth century, Wriston was surely the mold-breaker.

By inventing new instruments, such as the negotiable CD, introducing new ideas in the marketplace, and devising new loopholes, he chipped away at archaic pricing, product, and geographic barriers, and freed banks to compete with each other--and with non-bank competitive financial service organizations not subject to the banking industry's rules. And though Wriston's Citibank was chaotic and internally competitive, it provided the climate for risk-taking and creativity that allowed others to devise instruments--such as the currency swap--that broke down barriers to the free and efficient flow of capital.

By 1994, a number of items on the Wriston wish list had begun to come true. He finally got his wish on interstate banking, when Congress passed a law dropping these barriers. And though Wriston never pressed as hard to eliminate Glass-Steagall as he did to get rid of prohibitions against interstate banking and interest rate ceilings, he welcomed moves, now regarded as imminent, to do away with the barriers between investment and commercial banking and banking and commerce.

Ironically, as that was happening, the non-bank financial supermarkets that Wriston regarded as banking's stiffest potential competition fifteen years earlier were shadows of their former selves. Sears had given up on the concept, spun off Allstate insurance, and returned to its retailing roots. Likewise, the American Express/Shearson Lehman Brothers marriage had proved to be a fiasco. None of the synergies that American Express Chairman James Robinson and Shearson chairman Sandy Weill had envisioned back in 1981 had come to pass, and American Express by 1994 had gotten rid of Shearson Lehman and refocused on its credit card. Prudential Insurance would now have to shell out more than $1 billion to investors in soured limited partnership investments sold to them in the 1980s by its Prudential Securities unit. Apart from Merrill Lynch, Citibank was the closest thing to a financial supermarket still standing.

Wriston waffled on his commitment to investment banking. For a while, it appeared that his would-be successor, George Vojta, had led Bankers Trust to the promised land by transforming it into a trading house. But Bankers Trust forgot its customers along the way. In the wake of derivatives losses, the Procter and Gamble Company and Gibson Greetings Inc. sued BT in 1994, claiming the bank had misrepresented these products to them. Reed's task looked easy in contrast to that of BT chairman Charles Sanford. Reed had plenty of bum loans to dispose of, but Bankers Trust was faced with the task of restoring a lost reputation.

If there was a flaw in Wriston's intellectual leadership of the banking industry, it was his insistence that highly aggressive banks don't need capital as long as they are diversified and well-managed. Citicorp and other institutions that bought this line were ill-prepared to absorb the losses from their bad LDC, real estate, and LBO loans. In steering Citibank and the banking industry into the decade-long LDC debacle, Wriston relied on an inappropriate historical analogy. Even so, the crisis achieved what no army could: It pushed the Third World, particularly in Latin America, into the arms of Adam Smith. And by December 1994, when Mexico and other emerging markets blew up as they had more than twelve years earlier, investors, not banks, were left holding the bag.

But Wriston also guided the banking industry through many of the major financial crises of the postwar era, including Penn Central, Herstatt, Franklin National, and New York City's near brush with bankruptcy. In 1995, as Wriston was fading from the world stage, he left a vacuum in American economic and financial leadership that few were willing or able to fill. Indeed, as New York City ran into financial trouble again in the 1990s, there were no bankers with the wherewithal or interest to help patch it up again.

In an era when it was difficult to find a public figure untainted with personal scandal or financial malfeasance, Wriston stood above the pack for personal integrity. While he became a wealthy man as Citicorp chairman, there is absolutely no evidence that his business judgments, though sometimes off the mark, were ever skewed by personal greed.

Wriston's time horizon transcended Citibank's decade-long troubles. He prided himself on building an institution ""that would survive in the new world and be pre-eminent over time. It will go up and down and have problems.'' But he said, it has an ""infrastructure that no one else has duplicated and I don't think they're about to.'' That was true even as Citicorp was losing its ranking as the largest U.S. banking company to a combined Chase Manhattan and Chemical Bank, which in August 1995 announced plans to merge and retain the more prestigious Chase name. But Reed's bank is also narrower in focus, less ambitious, less of a player than it was under Wriston. It has largely abdicated the role it served in the Wriston era as an industry and intellectual leader and proponent of change. One reason surely was that John Reed lacks Wriston's commanding presence and prestige. Another, of course, was that the world itself had changed. In 1995, with the Latin debt and real estate crises behind him, Reed could concentrate on minding the store, expanding the global retail network, fine-tuning Citibank's operations and technology, selling telephone banking to customers, eliminating consumer transaction fees, and, with Citicorp stock trading at more than $60 a share, counting the paper gains on his stock options. Moreover, in the deregulated economy that Wriston had helped create, there were fewer external battles for John Reed to fight, even if he had the inclination to fight them.

Still, if one was to define Wriston's true legacy, it was Citicorp's emergence as the world's only international bank, one that has, at long last, even rewarded shareholders by making money. In light of the pain and suffering Mother Bank had just endured, that's about all that Walter B. Wriston could have wished for.

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