The US Treasury needs to follow the lead of Her Majesty’s Treasury when they detailed the “toxic assets of Royal Bank of Scotland and make the assets of Citigroup which we have guaranteed public… especially if Citigroup “buys” it’s way out of TARP…
Bloomberg reports… ~~~”Citigroup Inc. Chief Executive Officer Vikram Pandit is pressing the U.S. Treasury Department and regulators to agree as soon as this week on a plan to pay back $20 billion remaining from a government bailout, people familiar with the matter said.
Pandit, 52, wants an agreement in place this week or next, the people said, speaking on condition of anonymity because the discussions are private…
…Citigroup, which took $45 billion of TARP funds last year, in September converted about $25 billion of that into common stock, equivalent to a 34 percent stake. The Treasury Department, which is free to sell the stock at any time, is holding off on a sale until a plan can be reached with regulators for a payback of all remaining obligations from the bailout, a person close to the Treasury said last week.
Citigroup still has $20 billion in bailout funds along with guarantees from the Treasury, FDIC and Federal Reserve on $301 billion of devalued securities, mortgages, auto loans, commercial real estate and other assets. Citigroup paid $7 billion in advance for the guarantees, which last five to 10 years, depending on the type of underlying assets.”~~~
Earlier reporting on the review of the guarantees by the Congressional Oversight Panel…
Citigroup Asset Guarantees May Cost U.S. Taxpayers, Panel Says Bloomberg, November 9, 2009
~~~”U.S. taxpayers may have to share in the losses on $301 billion of Citigroup Inc. loans and securities covered by federal guarantees after unemployment reached a 26-year high, according to the Congressional panel overseeing bank-bailout programs.
The Federal Reserve Bank of New York projected a year ago that the Treasury Department might have to pay $3.96 billion on the guarantees if unemployment hit 9.5 percent, the panel said in a Nov. 6 report. The jobless rate rose to 10.2 percent in October, the Labor Department said last week.
The government hashed out the guarantees over a weekend in November 2008 to help shore up confidence in New York-based Citigroup and head off a run on the bank’s deposits. The New York Fed analysis, which wasn’t previously disclosed, raises questions about whether the Treasury Department and regulators were tough enough in the negotiations, said Joshua Rosner, an analyst at investment research firm Graham Fisher & Co.
“It looks like Citigroup got the better end of that deal,” Rosner said….”~~~
More on Citigroup at Riski…