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
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)
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(Newser) – 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.
(Read more financial crisis stories.)