When Todd Thomson, Citigroup’s former head of wealth management, lost his job earlier this year, there were reports that he was being punished for lavish spending. Offered as evidence by his detractors was an office — which some wags dubbed the Todd Mahal – reportedly featuring a wood-burning fireplace and a fishtank.

Thomson, who now runs private equity fund Headwaters Capital, told the Reuters Finance Summit that the wood burning fireplace story was flat-out wrong.

He pleads guilty to having what he describes as a fish BOWL, but argues that more than paid for itself in snaring wealthy Asian clients.

“I couldn’t ever visit a Chinese client and not have him have a goldfish pool somewhere in his office and his building always with eight red goldfish and one black goldfish because that’s good feng shui,” he says.

“If that gives me a little bit of leg up with 3 or 4 Chinese billionaires, I think I’ve paid for the goldfish bowl.”

Is Todd Thomson, former head of global wealth management at Citigroup, angling to return to his former employer as CEO?

Thomson was forced out of his job in January after an incident in which he was reported to have returned from a business trip to China on a Citi corporate jet accompanied only by CNBC TV journalist Maria Bartiromo, and amid allegations of lavish spending.

But others, including Thomson, have said the main issue was tension with Citi’s then CEO Chuck Prince, who quit over the weekend.

So now that Prince is gone, could Thomson, who also previously served as the bank’s chief financial officer be a candidate for the job?

“My own view is that my background is pretty good for that, given what I’ve done and what I’ve accomplished,” Thomson said at the Reuters Finance Summit, while making clear that he hasn’t been contacted about returning to his old employer. At least, not yet.

James Dunne, chief executive of Sandler O’Neill, a boutique brokerage which specializes in advising banks and other financial services companies on mergers and takeovers, expects foreign buyers to become increasingly active players in financial institutions M&A in the U.S. He says they will be drawn by the weakness of the U.S. dollar and as many domestic players retreat from making takeovers amid the current credit markets turbulence.

European and Canadian banks are already leading the takeover wave as shown by Royal Bank of Canada’s recent deal to buy Alabama National BanCorporation and Toronto-Dominion Bank’s planned takeover of Commerce Bancorp.  

On the European side, Dunne pointed to Madrid-based BBVA’s recently closed $9.1 billion takeover of Compass Bancshares, BBVA’s biggest-ever investment. Compass was advised on that deal by none other than Sandler O’Neill. 

Independent analyst Charles Peabody of Portales Partners freely admits he looks at the financial services industry from a decidedly pessimistic viewpoint. It’s no big surprise, then, that he’s a big skeptic when it comes to Goldman Sachs Group Inc., which has so far wowed investors with its ability to weather a subprime crisis that has forced multibillion-dollar writeoffs at rivals such as Citigroup and Merrill Lynch & Co.

What raised his eyebrows in this regard was Citigroup’s contention today that it was having trouble hedging its collateralized debt obligation exposure. He says that bolsters his suspicions that Goldman may not be quite as well hedged as its rosy third-quarter results made it appear.

He said that either Citi just missed the opportunity to hedge and then made other excuses for its oversight “or there’s something not right about Goldman’s reporting/accounting,” Peabody said, making clear which possibility he sees as most likely.

After Lehman Brothers came out with its better-than-forecast third-quarter results, Peabody says he described those earnings as “a quarter not to be believed.”  But that description, he now believes, could apply just as easily to Goldman’s most recent quarter.

“I really don’t believe those two organizations have come clean with their mortgage exposures,” he says.

Howard Lutnick, the head of Cantor Fitzgerald, says he fears that bankers may start to behave like George Bailey and his father in the iconic 1946 movie “It’s a Wonderful Life,” and keep loans on their books to maturity.

While this may be a reasonable response to the credit crunch and the losses that might be suffered if those loans are offloaded, Lutnick told the Reuters Finance Summit in New York that it would present a serious risk to the U.S. economy.

“If they hold the stuff and they don’t recycle it, it has got to slow down their lending,” he said. That in turn could worsen the credit crunch (or blockade as he terms it), and will require further interest rate cuts from the Federal Reserve.

On the criticism that Fed Chairman Ben Bernanke is just bailing out the financial sector, Lutnick said it was more of a question of his needing to look after his child, the economy.

“Whatever bad things your children have done, they are still your children,” he said. Perhaps Bernanke is playing the equivalent of the guardian angel, Clarence, in the movie, which starred Jimmy Stewart.

A proposal to overhaul one of the government’s pension systems was cleared by congressional committees this week in a rare agreement between Mexico’s top political parties. The legislation introduces private retirement accounts for public-sector workers but still needs approval from the Congress lower chamber and Senate.

If passed, the new pension system could push the government to take extra debt but would bolster public finances in the long term.

Mexico’s Deputy Finance Minister Alejandro Werner spoke at the Reuters Latin American Investment Summit about the benefits of the proposed changes to the pension system. 

US Airways Group’s takeover bid for Delta Air Lines is “the first step in a long dance” of increasing consolidation in the U.S. airline industry, Lazard Freres & Co. Deputy Chairman Kenneth Jacobs told the Reuters Investment Banking Summit in New York. ”I think that the massive restructuring that has gone on through the bankruptcy process, which is still underway for at least two of the players, probably enables more activity to take place now than at any other period of time. So, we are on the tip of the iceberg here.”