Illuminati schreef:
Citigroup, Fed Said to Weigh Plan to Limit Losses on Bad Assets
2008-11-23 21:58:29.170 GMT
By Bradley Keoun and Alison Vekshin
Nov. 23 (Bloomberg) -- Citigroup Inc. and U.S. regulators are in talks about a plan to limit the bank’s potential losses from toxic assets after the stock’s plunge last week sparked concerns about the company’s fate, people familiar with the matter said.
Regulators including the Federal Reserve and Treasury Department were locked in discussions with Citigroup this weekend and a deal may be reached as soon as today, according to the three people, who declined to be identified because the negotiations are confidential. While details of the potential plan remain in flux, it would likely require an infusion of government money, the people said.
Citigroup, led by Chief Executive Officer Vikram Pandit, lost 60 percent of its market value last week as investor confidence in the New York-based company’s prospects faltered after four consecutive quarterly losses. Unless the bank takes action, the share-decline may rattle Citigroup’s customers, counterparties and employees, threatening the operations of the second-biggest U.S. bank by assets, according to a report by David Hendler, an analyst at CreditSights Inc. in New York.
“We sense that Citi’s board will also recognize the difficult chain of events which can be brought about by its low stock price, and prefer to take action in the next few days or weeks,” Hendler wrote in the report yesterday.
Federal Reserve Board spokeswoman Michelle Smith declined to comment. Citigroup Spokeswoman Christina Pretto didn’t return phone calls seeking comment today.
Pandit, 51, told employees on a Nov. 21 conference call that he doesn’t plan to break up the company. He and Chief Financial Officer Gary Crittenden said they don’t expect to sell the Smith Barney brokerage unit, two people who listened to the call said at the time.