Bankers Now Think Citi Less Risky Than Goldman
Criticism sends Goldman debt costs higher
By Kevin Spak,  Newser Staff
Posted May 6, 2010 9:22 AM CDT
Goldman Sachs CEO Lloyd Blankfein testifies before the Senate Subcommittee on Investigations hearing on Wall Street investment banks and the financial crisis on Capitol Hill, April 27, 2010.   (AP Photo/Charles Dharapak)

(Newser) – One is the most profitable, successful bank on Wall Street, the other came within a hairsbreadth of nationalization. Who would you rather lend money to? Apparently, right now investors are going with the latter. As of Monday, Goldman Sachs' debt was yielding 2.73%, to just 2.29% for Citigroup, according to Bloomberg, meaning that the storm of negative publicity around Goldman has convinced banks that it's the riskier bet.

Citigroup has gotten three bailouts, leaving it 36% government-owned, but fraud charges have savaged Goldman's brand. “No one’s attacking Citigroup over anything anymore, and everyone’s attacking Goldman Sachs over everything,” said one banking analyst. “ It logically tells you that Citigroup should have a lower spread.” Yesterday, Fitch Ratings downgraded Goldman's A+ credit outlook from “stable” to “negative.”