Washington, Nov 24: On Sunday, Nov 23 the US government announced $300 billion bailout to the troubled financial institution Citigroup. Other than this, the United States Treasury will invest $20 billion in the bank. This is in addition to the $25 billion that US government gave to Citigroup in Oct. The Treasury also said that the US Federal Reserve stood ready to backstop any additional risk in the asset pool through an offer of a non-recourse loan.
Meanwhile, the US government has decided against taking over Citigroup likewise it did with AIG or the American International Group. But the concerned officials are still unsure of what measures to be taken to restore confidence in the company. For this reason, the Citigroup officials are enquiring the possibility of mergers.
The government and Citigroup officials are of the view that the ongoing situation is daunting. Because of Citigroup's size and scope-it operates in just about every country and competes in just about every financial business, the company's survival is a national concern.
Although Citigroup is telling its investors that the capital position is strong, investors have lost confidence in the current management led by Indian-American CEO Vikram Pandit.