Citigroup Offers Five Times Leverage to Bank Depositors to Trade in Foreign Currencies

Citigroup Offers Five Times Leverage to Bank Depositors to Trade in Foreign Currencies

By Pam Martens: August 4, 2014

It’s so crazy that one’s first instinct is that it must be a spoof web site. It reads:

“A Citibank International Personal Bank FX Leveraged Loan Account can help you maximize the most of what you have. It allows you to borrow up to 5 times your deposit balance to trade in foreign currencies, so you may increase your potential investment power.” (The italics on deposit balance are ours.)

It turns out that this is a real Citibank offering, a real Citibank web site, and there is a similar deal being offered in Hong Kong by Citibank – one of Wall Street’s largest banks – a bank that appears hell bent on setting a Guinness World Record for the most screw ups in one decade.

Putting aside the fact that Citigroup, parent of Citibank, is under investigation for potentially helping to rig foreign currency trading with other global banks, there is the fact that Citigroup simply cannot afford another hit to its reputation – like inducing bank depositors to gamble with five times leverage in the highly complex foreign exchange markets.

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