In a Reuters brief, chief financial officer John Gerspach of Citigroup cautioned that the economic recovery is too weak to cut mortgage loss reserves. 

Citi is pursuing simple back-to-basics model and the bank is focused on winding down Citi holdings in an economically rational manner. If the currently housing outlook continues, Citi may sell $750 million to $1 billion in mortgages per quarter. 

The brief states:

“Gerspach: Funding for buyers is most significant impediment to selling mortgage assets in Citi holdings *CFO: likely could not sell mortgage assets at current prices without hit to regulatory capital and substantial writedown.”

Read the full brief here.