Globonomics!

Consulting|Technology|International business

US Government bails out CITIGROUP

leave a comment »

As expected, the US Government bails out CITIGROUP. They are extending a lifeline of $20 billion at a higher rate of interest than that given by the TARP plan. Also, they plan to absorb some of the bad assets provided CITI takes the initial $5 billion followed by the US Government followed by the FDIC (the total gurantee amount by the US Government, FDIC and Federal reserve might amount to almost $300+ billion). In return, the US Government gets preferred shares of CITI (NYSE: C). Bonuses of executives (executive compensation) would have to have the Government’s approval.

Let’s see how it pans out but allowing a 200 year old bank operating in 106 countries to fail would have proved catastrophic.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: