As the fallout from Citigroup’s ill-fated European government bond trading continues to reverberate, one starts to understand the true meaning of reputation risk. The treasurer at a major European issuer summed up Citi’s plight like this: “If it turns out that this was just an isolated group of traders that got carried away, then we can accept that. But if it transpires that the trade was done with knowledge of more senior executives then it would affect our relationship with the bank.”
