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Feds, Citigroup Close In on Rescue Deal
Government could take over losses for troubled financial giant
By Laurel Jorgensen
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Posted Nov 23, 08 5:54 PM CST
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(Newser)
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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.