Feds, Citigroup Close In on Rescue Deal

Government could take over losses for troubled financial giant
By Laurel Jorgensen,  Newser Staff
Posted Nov 23, 2008 5:54 PM CST
Feds, Citigroup Close In on Rescue Deal
Traders gather at the post that handles Citigroup on the floor of the New York Stock Exchange Friday, Nov. 21, 2008.   (AP Photo/Richard Drew)

Citigroup is closer to getting a new round of financial help from the feds, the New York Times reports. Regulators are discussing a plan today for the US to take on losses at the bank if they exceed certain levels. In effect, the plan would create a "bad bank" where Citigroup could rid its balance sheet of billions in toxic assets and possibly off-balance-sheet entities, the Wall Street Journal reports.

The feds would receive a stake in Citigroup, but it's unclear what kind and at what point the government would step in. Regulators also haven't specified the source of the money; the $700 billion bailout, the Federal Reserve, and the FDIC are all options. Citigroup, which lost half its stock market value last week, already received $25 billion under the Treasury's initial bailout plan.
(More financial crisis stories.)

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