Citigroup’s $52 Trillion Derivatives Book: A Snowflake Away From Financial Meltdown? (Part I)

Citigroup’s off-balance sheet notional trading derivatives book currently stands at $52 trillion.

Some investors believe that a “black swan” event at some point will set the trigger for massive losses on the large banks’ derivatives books and completely wipe out their capital.

These investors appear to believe that regulators and management completely misunderstand and thus underestimate the systemic and existential risks involved.

Are the derivatives books of TBTF banks really ticking time bombs, or are misinformed investors and certain parts of the media barking up the wrong tree?

In this article, I will explain the risks embedded in Citigroup’s book and endeavor to answer this very important question.


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