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U.S. Agrees to Raise Its Stake in Citigroup - NYTimes.com
- After two multibillion-dollar lifelines failed to shore up Citigroup, the government will increase its stake to 36 percent from 8 percent.
- Citigroup will shake up its board so that it has a majority of independent directors, a move that federal regulators had already been pursuing
- The moves come as the bank announced that its 2008 loss had spiraled to $27.7 billion, among the largest in corporate history.
- Under the deal, the Treasury Department has agreed to convert up to $25 billion of its preferred stock investment in Citigroup into common stock, giving taxpayers more risk, but more potential for profit if the company recovers.
- Taxpayers, after pumping more than $45 billion into the bank, have become Citigroup’s single largest shareholder.
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