• The New York Times, Thursday, April 3, 2008 11:30 AM

Ten years after its merger, the behemoth formed by the union of Citicorp and Travelers seems to lumber from one crisis to another. Even within Citigroup, many have rejected Sanford Weill's grand vision of a globe-spanning financial supermarket--an agglomeration of investment and commercial banking, insurance and fund management that could prosper in both good times and bad.

Bloated costs, outmoded technology and political infighting have hobbled the giant company. Now run by newly minted CEO Vikram S. Pandit, it has even abandoned its famous Weill-era Travelers logo, the red umbrella, in favor of an emblematic red arc. "I cannot think of one positive thing that developed as a result of these two companies," says Richard X. Bove, an analyst at Punk Ziegel.

Whatever happens at Citigroup, the aftershocks of the 1998 merger are still reverberating. The deal paved the way for the repeal of the Glass-Steagall Act, which separated investment and commercial banks. Subsequent mergers helped U.S. institutions compete with foreign rivals, but also fostered some of the financial innovations that many say contributed to the subprime mortgage crisis.

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