It’s garbage time for Citigroup, which led the charge through both the banking boom and the financial meltdown.
Uncle Sam already gave Citigroup $45 billion and promised to limit the bank’s losses on $300 billion in troubled loans, but executives at the ailing bank are now reportedly asking the federal government to sweeten the deal. One scheme has Washington exchanging preferred stock for common stock. That might help the bank attract more investors and reduce the taxpayers’ chances of ever getting their money back.
Citigroup executives have approached federal regulators to discuss steps the government could take to strengthen the troubled company, according to two people familiar with the matter.
The giant New York bank is under mounting pressure to convince investors that it can survive its financial problems. The government already has invested $45 billion in Citigroup and promised to limit its losses on a portfolio of more than $300 billion of loans and other troubled assets. But investors remain nonplussed, and the company’s stock price has dropped 71 percent this year.