Citigroup Will Be Required by U.S. to Get Private Capital
The Obama administration will require Citigroup Inc. to raise private capital and make changes to its board of directors as part of an effort to strengthen the bank, according to people familiar with the matter.
The plan, which may be announced as soon as today, will involve the Treasury Department converting preferred shares into common stock. The government doesn’t immediately intend to provide additional money after channeling $45 billion to the New York-based bank last year, the people said.
Citigroup Chief Executive Officer Vikram Pandit, 52, is trying to bolster confidence after his bank’s stock price sank below $2 last week for the first time in 18 years. The government is supporting the firm because of concern its failure might roil already weak global markets.
Citigroup spokesman Jon Diat declined to comment.