Much has been made about the recent rejection by the Federal Reserve toward the plans of Citigroup (NYSE:C) to buyback more of its stock and issue a bigger dividend, but CEO Michael Corbat provided a surprising glimmer of hope to investors on the latest earnings call.


The difficult question
The announcement of Citigroup's first quarter earnings of $1.23 per share which surpassed analyst expectations and were identical to what the bank saw in the first quarter of last year led to the bank witnessing its stock price rose by nearly 4.5% on the day of the announcement.

However on the conference call to discuss the earnings, much attention was devoted to the troubles which have plagued the bank in 2014. The aforementioned denial from the Federal Reserve to buyback $6.4 billion worth of its common stock and raise its dividend from $0.01 to $0.05 a quarter, and the revelation of the fraud from its operations in Mexico, have led many to question the underlying value of Citigroup.

While many questions were raised from various analysts, the well-known Mike Mayo -- author of Exile on Wall Street: One Analyst's Fight to Save the Big Banks from Themselves -- asked one of the most difficult ones on the conference call, saying:

Related to CCAR, who at Citigroup is accountable for the failed stress test and what are the consequences?

Certainly the answer to that question is important thing to know. After all, many have suggested the denial by the Federal Reserve of Citigroup came as a surprise to everyone. And ultimately someone is responsible for that failure.

Yet who Michael Corbat said bore that responsibility was eye-opening.

The surprising response
Responding to Mayo's question, Corbat said:

Mike, it's Mike. I am. Obviously, when you think of something that is as important as this for the institution and our shareholders, it's at the top of the house. So I'm accountable.

Being at the top of a bank with $1.9 trillion in assets is undoubtedly difficult. But there are also nearly 250,000 employees at Citigroup, meaning many individuals -- perhaps even thousands -- were tasked with ensuring the bank would be in a place to have its capital plans approved and take one more step down the road to recovery from the depths of the financial crisis.

Citigroup Tower By Asibiri

Source: Flickr / asibiri.

However the boldness of Corbat to bear the responsibility of the failure speaks volumes. Likely no one would've questioned if he said something like, "We have great employees here, and I'm not going to discuss who's responsible." Or perhaps he could've said, "We're looking into the groups responsible and are taking the appropriate actions."

But instead his willingness to say he alone should be held accountable speaks volumes about his management capabilities, and understanding of his responsibilities as the chief executive.

The key takeaway
Medal of Honor recipient General Douglas MacArthur once said, "A true leader has the confidence to stand alone, the courage to make tough decisions, and the compassion to listen to the needs of others."

And while there is no denying the failure of Citigroup to receive approval from the Federal Reserve was deeply disappointing, Corbat's decision to stand alone and take responsibility and shows just how focused he is on ensuring the bank makes the necessary changes to begin returning its earnings to shareholders in a meaningful way.

It is far too early to know what the ultimate outcome of these efforts surrounding the CCAR in 2015 will be, but it is encouraging to know Citigroup is indeed run by a "true leader," as MacArthur would say.

Patrick Morris has no position in any stocks mentioned. The Motley Fool owns shares of Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.