Morning Business Memo

Dec 7, 2011 7:42am

“Very encouraged.” That’s Timothy Geithner’s take on the progress being made to shore up the euro. The US Treasury secretary is in Paris. At a summit meeting on Friday, European leaders will discuss proposals to impose greater budget discipline on 17 Eurozone nations. If the reforms called for by Germany and France are approved, member states would give up some of their national sovereignty. Stocks rose in response to decisive steps by Europe to curtail the debt crisis.

Citigroup plans to lay off 4,500 workers in the coming months. CEO Vikram Pandit says Citi will also take a $400 million charge in the fourth quarter to cover severance and other costs as the bank downsizes. The New York Times says Citi now has roughly 100,000 fewer employees than it did at the end of 2007, before the worst of the financial crisis. Citi and some other big banks have been hit by a recent loss in trading volume and exposure to Europe’s debt problems. Most of the job losses will come from Citi’s back-office and investment banking operations.

They may not say so publicly, but some top financial industry executives are said to be “seething” over President Obama’s speech in Kansas. There is a “deficit of trust” between Main Street and Wall Street, said the president, and that big banks must “go the extra mile” to close it. The speech had a populist message, suggesting the middle class is under siege from wealthy interests. On Dodd-Frank reforms, Obama said “unless you’re a financial institution whose business model is built on breaking the law, cheating consumers and making risky bets that could damage the entire economy, you should have nothing to fear from these new rules.”

Former New Jersey Gov. Jon Corzine is facing a lot of questions about his role in the collapse of MF Global. He faces subpoenas to testify to Senate and House committees. The trading firm made a disastrous bet on European debt. Corzine ran the company. Nearly $1.2 billion is estimated to be missing from MF Global’s customer accounts.

Richard Davies, Business Correspondent, ABC NEWS Radio twitter.com/daviesabc abcnrny

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