Citigroup receives government bailout
November 24, 2008 by Personal Liberty News Desk
An additional $20 billion of taxpayer money is set to be given to Citigroup in an effort to prevent the banking giant from collapsing.
Just a few weeks ago, the financial institution received $25 billion under the government’s bailout plan.
However, shares of Citigroup plummeted by 60 percent last week. The prospect of the bank’s failure and the subsequent chaos that it could cause in the financial markets prompted the Treasury to act again.
The government also said that the Treasury, FDIC and Federal Reserve would back up the majority of losses from around $306 billion in troubled assets held by the bank.
Under this arrangement, Citigroup is responsible for absorbing an initial $29 billion, as well as 10 percent of additional losses.
Responding to news of the latest bailout, some investors were critical of the decision.
William Smith of Smith Asset Management told Reuters that the rescue amounted to "seeing an inept management team being rewarded by the U.S. government."
Citigroup serves more than 200 million customers in over 100 countries worldwide.