How do you get top talent to work for a Fortune 500 company that’s one-third owned by the federal government, bound by onerous rules on pay and benefits, and so out of favor with investors that its stock won’t budge above $3.50?

If you’re Citigroup chairman Dick Parsons, who is trying to help embattled CEO Vikram Pandit lure talent to the bank giant’s management and board, you pitch a higher calling. “It’s almost like a patriotic duty,” says Parsons about working at Citi. “Plus it’s damned interesting.”

Parsons, a Citi director since 1996, stepped up to chairman in February — an unexpected career shift for the man who spent most of the past decade as chairman and CEO of Time Warner . Parsons talked about Citi’s challenges in an interview with Fortune managing editor Andy Serwer Monday morning at “The Economy 2009,” a half-day confab hosted by CNN, Time and Fortune.

As healthier rivals such as JPMorgan Chase and Goldman Sachs have received the green light to return TARP bailout funds to the federal government — while Uncle Sam’s ownership stake on Citi is growing larger — the bank’s main problem long-term will likely be “HR,” admitted Parsons. That is, Citi’s ability to lure top talent. “I do worry that we’ll be at a competitive disadvantage,” he said, pointing out that he’s working for no cash, only stock and options. “There are some people in the world,” he said, obviously referring to himself, “who want to do something that is fascinating and interesting and important.”

Maybe he should have added the word “impossible.” Anyone who stayed to the end of “The Economy 2009” wouldn’t want to go work for Citi — or probably anywhere else in the banking industry. The summit closed with a doom-and-gloom panel that included Yale Professor Robert Shiller, New York University Professor Nouriel Roubini, and bank-industry analyst Meredith Whitney, who helped expose the balance-sheet problems at Citi and other banks two years ago. With CNN anchor Christine Romans leading the discussion, this session could have been titled “Goldilocks and the Three Bears.” (No offense to Romans, who isn’t quite blond!)

As each of the three economic oracles vied to be more bearish than the other, they laid out a scenario where home prices will fall another 15-20%, unemployment will rise to 11% by year-end, the recession will last another six to nine months — and banks will pay the brunt of it. “Losses of banks will accelerate,” Roubini predicted, contending that commercial real-estate loans are the industry’s next toxic problem.

Whitney, who declined to talk about her outlook for Citi specifically, nonetheless agreed and suggested that it’s not yet the time to bet on an industry recovery. “Banks are sitting on rotting assets,” she said. “The liquidity crisis is over. But the credit crisis continues.”

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