Citigroup‘s chief executive, Michael Corbat, understands Washington’s importance.
On Wednesday the bank’s new boss cut the ribbon at a new branch in the nation’s capital. It’s not just any old location, but on K Street, home to the city’s legions of lobbyists. The potential symbolism is hard to avoid: that Citi may be about to get more engaged with Washington’s influence peddlers. Shareholders might like that - regulators perhaps not so much.
The event itself emphasized the new office’s elegance. It features lots of glass and clean lines, almost reminiscent of an Apple store. And it comes replete with high-tech features like digital media walls and environmentally friendly elements.
But a hulking bank with close to $2 trillion in assets and more than 4,600 branches around the globe doesn’t send its chief executive to open a new store. And it’s not as if its latest in Washington is the first of its kind to display all the new gadgetry. Citi has already built that into some of its so-called smart banking locations.
It’s the location that nails it. Many of the special interest groups hoping to persuade lawmakers and regulators of their cause base their hired guns on K Street. Some of that industry’s biggest names popped by to the invitation-only event, including Financial Services Forum’s chief executive, Rob Nichols, Financial Services Roundtable boss Tim Pawlenty and the Business Roundtable’s president, John Engler.
It’s hard to knock Mr. Corbat for wanting a little face time with them. Lawmakers and watchdogs wield more power - and are more inclined to use it - than in the past. So using any opportunity to be as plugged in to the Washington net as possible is good business. That should appeal to Citi’s shareholders, at least.
But it might not sit as well with regulators and politicians. They had to bail Citi out twice in the crisis - and the bank also stepped on many of the financial landmines of the previous two decades.
If nothing else, though, Mr. Corbat’s appearance is a reminder that large financial institutions don’t intend to let bureaucrats or lawmakers ravage their profits without a fight. Regulators should remain on their guard.
Daniel Indiviglio is Washington columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.
