McDonald's french fries aren't the only product that has been under fire to downsize, as Citigroup (NYSE:C) as a whole is under pressure to take further steps to downsize the company from a government watchdog group.

A congressional oversight panel talking to Citigroup CEO Vikram Pandit was pushing Pandit on why he should take more steps to break up the company so it doesn't present a hazard to the overall markets as it did in 2008.

Pandit responded by saying the company has already taken steps to shrink itself, by divesting itself of a number of businesses. He added that capital reserves are now solid at the company, which is far more liquid than in 2008 from the variety of steps they have taken to shore up their business.

There is also the possibility of Congress developing a mechanism of some type which would allow large financial institutions to be dismantled in a way which wouldn't cause any damage to other businesses or the economy, and which wouldn't need to be bailed out by taxpayers, said Pandit.

Although Pandit attempted to make it look like Citigroup was now a company focused on its core business and not trying to be a "financial supermarket," some on the panel weren't convinced that that was the case, and continued to press for a smaller Citigroup.

"The sheer magnitude of Citigroup's operations, and the company's history of receiving extraordinary government support, has led this panel to an inescapable conclusion: The United States government will bear any burden and pay any price to ensure that Citigroup does not fail," said Elizabeth Warren, chairwoman of the congressional oversight panel.

Proprietary trading was also brought up as something that big banks should be relieved of. Proprietary trading refers to when banks use their own money to make risky trades. This is especially opposed by large financial institutions which also own commercial banks.

No matter which way the argument went, Pandit believes Citigroup has no more need of oversight and interference from the government, as he implied they've taken care of the needed issues themselves.