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US increases stake in Citigroup

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Citigroup and the US Treasury have reached a deal that sees the government substantially increase its stake in the ailing bank from 8% to 40%.

The deal does not require extra taxpayer investment, but is dependent on Citi raising extra private capital.

Citi shares opened down more than 30% as investors worried about their stake in the bank being diluted by the move.

As one of the banks hardest hit by the continuing credit crisis, Citi has already gained $45bn in Treasury cash.

FULL STORY


Is AIG next, or will it be broken up?
 
They went down to 1.43 so far today
 
Citigroup shares plunge again after latest bail-out plan is revealed

Panicked Citigroup shareholders fled the ailing banking group in droves last night as the US government stepped in with plans to take a 36% stake in the company and remove a number of directors.

After the government released plans to take what is in effect a controlling shareholding in the world's biggest banking group Citi shares plunged 39% to close at just $1.50. The rout contributed to a fall of 119 points in the Dow Jones Industrial Average, taking it to 7,062 points - a twelve-year low.

The US government's move, made after days of speculation that Citi was to be nationalised, is the third attempt by the US Treasury to stabilise the troubled banking group and arrest the rapid decline in its share price.

FULL STORY
 
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