New U.S. stake in Citigroup may not calm doubts
Originally posted on Reuters
Even if the government took a large common equity stake in Citigroup Inc, worries would likely persist about the bank’s ability to absorb soaring losses in a deepening recession.
The third-largest U.S. bank by assets is in talks with federal regulators on a plan for the government to increase its stake, a person familiar with the matter said. Converting $45 billion of preferred stock, which the government obtained last fall, to common stock is one of many options, the person said.
An agreement could be announced Monday or Tuesday, CNBC television said.
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