According to a Reuters report, published in today's Milenio the Citigroup is at odds with the U.S. government over the aid money. The issue is how the government will divest its shares in the bank.
The U.S. government has nearly seven billion seven hundred million shares in the bank.
Citigroup and the U.S. government disagreed on how much money the bank needs to get out of the Troubled Assets Relief Program (TARP). The negotiations may take weeks or even months, said sources involved in the matter.
Those involved must resolve issues including how the government will divest its approximately 7 thousand 700 million shares in the bank. Another concern is how will the government insure against losses.
Citigroup spokesman Stephen Cohen, declined comment, the Reuters reported. The government with a big loan had insured the company against losses. The U.S. government had made very clean exists from other banks it bailed out, such as Bank of America and Goldman Sachs.
Many may ask, if the government was successful with the other two banks, why problems with the Citigroup. Here is what 24/7 Wall Street comments. "The biggest hurdle to Citi repaying its TARP funds is the several government agencies including the FDIC do not believe that the big bank is healthy enough to repay what it owes taxpayers and still have a viable balance sheet, especially if commercial and consumer credit write-offs increase next year. Citi may have to come back to the government a second time if its earnings are hurt badly enough. Federal agencies would then have to admit that they acted prematurely."
The taxpayers own nearly the 3rd of Citigroup.
Written by Armen Hareyan
Reference: Reuters/ Milenio
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
