The chairman and chief executive officer of Citigroup Inc., Charles Prince, resigned after $6.5 billion of writedowns and losses from the credit markets and shares of the biggest American bank slumped to a four-year low.

The chairman of Citi Europe, Sir Win Bischoff, is interim chief executive until Mr. Prince’s replacement is found and a former secretary of the Treasury, Robert Rubin, has been named chairman, New York-based Citigroup said in a statement yesterday. Citigroup also said it will take an additional $8 billion to $11 billion in writedowns related to mortgage-related securities.

“It is my judgment that given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as chief executive officer is to step down,” Mr. Prince said in the statement.

Mr. Rubin, along with the chief executive officer of Alcoa Inc. Alain J.P. Belda, Time Warner Inc. Chief Richard Parsons, and Franklin A. Thomas have been named to a special committee to find Citigroup’s next chief executive officer.

Citigroup, which has 327,000 employees, offices in more than 100 countries, and $2.2 trillion in assets, has foundered since Mr. Prince succeeded his mentor, Sanford Weill, in October 2003. The credit turmoil that began in the subprime mortgage market sent Citigroup’s quarterly profit to its lowest level in three years and the company’s stock has plunged 32% in 2007, twice as much as Bank of America Corp. and JPMorgan Chase & Co.

Mr. Prince, 57, is leaving as analysts questioned whether Citigroup will have to cut its dividend because of a shortage of capital and the U.S. Securities and Exchange Commission scrutinizes the company’s accounting for structured investment vehicles that hold mortgage-backed securities. The company has said its SIV accounting complies with “all applicable rules and regulations.” Citigroup said in the statement yesterday that it has no plan to cut its dividend.

“While significant uncertainty continues to prevail in financial makets,” Citigroup expects that capital ratios “will return within the range of targeted levels by the end of the second quarter of 2008,” while maintaining the current dividend, the company said. Analysts at CIBC World Markets and Morgan Stanley told clients last week to get rid of Citigroup shares. CIBC’s Meredith Whitney said Citigroup may have to sell assets because it needs to raise $30 billion of capital. The combination of $25 billion of acquisitions in the past 19 months and the lowest cushion for losses “in decades” increases the risk of owning the stock, she said. An analyst at Deutsche Bank AG, Michael Mayo, said last month that Mr. Prince should be replaced.

Mr. Prince joins a growing list of executives who have lost their jobs in fallout from losses in the fixed-income markets. He departs less than a week after Merrill Lynch & Co., the world’s biggest brokerage, ousted Stan O’Neal after the New York-based firm disclosed $8.4 billion of writedowns.

The world’s largest financial institutions have disclosed more than $30 billion of writedowns as the worst housing slump in 16 years has led to record American foreclosures and losses in the subprime market. Analysts have said Citigroup may have to take more writedowns in the fourth quarter to reflect the decreasing value of mortgage-related securities.

Just four months ago Prince said he “felt good” about Citigroup’s direction. He said on October 15 when the company reported the 57% drop in third-quarter earnings that momentum “continues very strong” in most of the company’s businesses. Citigroup’s return on equity, a gauge of how effectively the company reinvests earnings, fell to 7.4% from 18.9% a year earlier, making it the second-lowest among Wall Street firms after Bear Stearns Cos.’ 5.3%.