Citigroup is near agreement on government bailout

Citigroup is nearing agreement with US Government to house its some financial risky assets. The discussion is toward to creation of what would essentially be a “bad bank” that would help Citigroup to cleanse its balance sheet of billion of dollars in potentially toxic asset.

The bad bank also might absorb a part of $1.23 trillion assets from Citigroup’s off-balance-sheet entities. Some of those assets are tied to mortgages. Citigroup also has about $2 trillion in loans, securities and other assets on its balance sheet as of September 30.

The new entity is expected will hold about $50 billion of assets, as much as the amount of the recent Citigroup losses on loans. CEO Vikram Pandit insisted on November 21 that the company has plenty of capital and liquidity. It was just like what had been saying by Bear Stearns and Lehman’s spokespersons before their companies collapsed.

To prevent panic rush from withdrawing deposits, the Bank employees have been telling to customers that their deposits are safe.

Related Posts :

1. Citigroups engaged in a massive fraud scheme against Japanese Banks
2. Citigroups will take $3 billion write-down

Sources :

1. Bloomberg: Citigroup May End Up With U.S. Government Rescue (Update1), November 22, 2008 08:27 EST
2. The Wall Street Journal: Citigroup, U.S. in Talks to Create 'Bad Bank', November 23, 2008, 5:11 P.M. ET

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