Treasury Considering More Citigroup-Style Rescue Packages

WASHINGTON — The Treasury Department opened the door Friday to using a Citigroup-style rescue package to help other troubled financial institutions.

The financial lifeline thrown to Citigroup Inc. in late November involved backing billions in risky assets and providing the banking giant with a fresh capital infusion.

Treasury said participation by other companies in such a program would be weighed on a case-by-case basis. Treasury said it would consider, among other things, whether the "destabilization" of a financial institution could threaten the viability of creditors and others. It also would weigh the extent to which the institution faced a loss of confidence because of the troubled assets it held.

The information was contained in guidelines for the initiative, dubbed the Targeted Investment Program, unveiled on Friday.

Separately, a new program that provides government backing for a financial institution's potential losses from risky assets will be used sparingly, the department said. Congress required that the insurance program be created as part of the $700 billion financial bailout package enacted in October.

"This program will be applied with extreme discretion in order to improve market confidence in the systemically significant institution and in financial markets broadly," the department said. "It is not anticipated that the program will be made widely available."

The department said it is exploring using the program to address guarantee provisions that were part of the Citigroup rescue package. The program provides guarantees for troubled assets held by a financial institution that would otherwise risk a loss of market confidence.

Treasury said it would determine eligibility for the program on a case-by-case basis. In accordance with the law, any assets to be guaranteed must have been originated before March, 14, 2008.

Comments

[hildutus]

Dear Readers,
Thank you so much for bailing out Citigroup with your generous billions. Right after your fine gift, I received a dividend payment as a token of your earnest generosity. Of course, it was only for $144, and that won't come close to the extra taxes I'll no doubt owe to make this wonderful gift possible, but think of all the more affluent investors who have received so much more in dividends and pay so much less in taxes. Let me thank you on their behalf as well.
Sincerely yours,
Fellow Sucker

P.S. But at least I got $144 for my stock that is now worth 1/10 of what it was before mismanagement!

[lex811]

into the abyss.

[PhilipTaylor]

OUTRAGEOUS!

PAQULSON needs to go to JA1L NOT BE GIVEN ACCESS TO FUNDS!

[redhot200822]

One way to see what's going on is review the SEC filings.

http://biz.yahoo.com/e/081126/c8-k.html

[grateful4thedead]

Hey PPT....I like the acronym "TIP"....i­t speaks volumes!