While some firms are moving to the global banking model -- The original one stop shopper model at Citi fails
Citi gives up control of brokerage to Morgan Stanley, one step toward ending supermarket model
NEW YORK (AP) -- The original financial supermarket is dead.
Citigroup signaled the end of a decade-long experiment to create one-stop shopping for financial services -- everything from consumer loans to investment banking -- with Tuesday's announcement that it was merging its Smith Barney brokerage into a joint venture with Morgan Stanley.
The idea behind the supermarket is that the average person can do all his saving, borrowing and investing with one company. Citigroup had it all, the retail and business banking operations, the investment banking business, the brokerage, even Travelers insurance. Whether that one company does it better than a number of specialized companies does, though, has been the big question facing shareholders since the deregulation of the banking industry in the 1990s. And Citi's announcement Tuesday further undermines the idea that one company can handle such diverse businesses at once.