Here’s Why Citigroup Stock Is Riskier Than Other Banks

Here’s Why Citigroup Stock Is Riskier Than Other Banks

Citigroup (NYSE: C) has done a lot over the past decade to streamline its operations and reduce risk, but it's still one of the riskiest banks you can invest in. One place this shows up is in Citigroup's source of funds.

To understand this, it's helpful to remember exactly what a bank does. In fancy terms, banks arbitrage interest rates. They buy money at low interest rates and then sell that same money (by making loans) at higher interest rates, pocketing the difference. A bank is like a book store in this regard, but instead of buying and selling books, banks buy and sell money.

Image source: Getty Images.

Continue reading

Source: Fool.com