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Home >> Keeping Your Money Safe
Citigroup to Receive Government Assistance
Citigroup is the latest major financial services holding company to receive government assistance, according to a joint statement released late Sunday evening, November 23, 2008. The Department of the Treasury, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation jointly announced an agreement with Citigroup to provide a package of guarantees, liquidity access and capital. |
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Treasury and the FDIC will provide Citigroup protection against major losses on a group of $306 billion in loans and investments backed by residential and commercial real estate. Citigroup will continue to hold those loans under the arrangement, and will issue the government preferred shares. The Federal Reserve has agreed to provide a stand-by loan to further protect Citigroup from other risks in that portfolio.
Treasury has agreed to invest $20 billion in exchange for 8% preferred stock. Citigroup has agreed to comply with government restrictions on enhanced compensation for key executives, and will implement a mortgage modification program developed by the FDIC in connection with its management of failed IndyMac Bank.
Published on BankingQuestions.com 11/24/2008
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