Monday, November 24, 2008

Citibank Gets $20 Billion Plus $306 Billion in Loans and Securities Guarantees

Robert Schmidt of Bloomberg News reports that:

"The U.S. government agreed to protect $306 billion of loans and securities on Citigroup Inc.'s books against losses, as it seeks to shore up investor confidence in the bank.

Citigroup will, as a fee for the guarantee, provide preferred shares to the Treasury and Federal Deposit Insurance Corp., the regulators said in a statement. The government will also inject $20 billion into the bank from the Treasury’s $700 billion Troubled Asset Relief Program.
'We will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks,' the regulators said in the statement.

The Federal Reserve, the Treasury and other regulators have been negotiating with Citigroup throughout the weekend. Citigroup lost 60 percent of its market value last week as the company’s prospects faltered, rattling customers, counterparties and employees."

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