The Financial Times reports that Lloyd Blankfein, CEO of Goldman Sachs, called Vikram Pandit, his counterpart at Citi, to discuss a possible merger. The move was made at the suggestion of regulators shortly after Goldman decided to convert to a bank holding company. Pandit rejected the deal, which would have been structured as a Citi acquisition. You have to wonder if this was the right call. The deal would have set the world on fire. Instantly, Citi would have jumped right back to the top of the industry, trumping Bank of America and JPMorgan Chase, which have expanded greatly during the crisis. There would have been a large number of layoffs. Regardless, marrying the retail deposit base of Citi with Goldman's superlative trading and investment banking would have been a game-changing move, which is exactly what some think Pandit needs to do. Oh, what might have been.

For more:
- here's the FT article

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