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| US rescues ailing Citigroup bank | US rescues ailing Citigroup bank |
| (20 minutes later) | |
| The US government has announced a rescue plan for the Citigroup banking giant after its shares plunged by more than 60% last week. | The US government has announced a rescue plan for the Citigroup banking giant after its shares plunged by more than 60% last week. |
| The US treasury department is to invest $20bn (£13.4bn) in return for preferred shares in Citigroup. | The US treasury department is to invest $20bn (£13.4bn) in return for preferred shares in Citigroup. |
| The treasury and the Federal Deposit Insurance Corp will also guarantee up to $306bn (£205bn) of risky loans and securities on Citigroup's books. | The treasury and the Federal Deposit Insurance Corp will also guarantee up to $306bn (£205bn) of risky loans and securities on Citigroup's books. |
| The plan follows a $25bn injection of public funds in the bank last month. | The plan follows a $25bn injection of public funds in the bank last month. |
| Citigroup's market value fell to $20.5bn on Friday, compared with $270bn in 2006. | |
| Last week the company announced 52,000 job losses worldwide, on top of 23,000 job cuts previously announced. | Last week the company announced 52,000 job losses worldwide, on top of 23,000 job cuts previously announced. |
| Citigroup has lost more than $20bn in the past year because of the global financial crisis, suffering four straight quarterly losses. | Citigroup has lost more than $20bn in the past year because of the global financial crisis, suffering four straight quarterly losses. |
| 'Protecting taxpayers' | 'Protecting taxpayers' |
| We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks Federal statement . | |
| The action plan was announced after emergency talks over the weekend between the bank and the treasury department, the Federal Reserve and the Federal Deposit Insurance Corp. | The action plan was announced after emergency talks over the weekend between the bank and the treasury department, the Federal Reserve and the Federal Deposit Insurance Corp. |
| Citigroup is one of the leading US banks and has operations in more than 100 countries. | |
| Many analysts had calculated that the huge financial institution was too big to allow to fail. | Many analysts had calculated that the huge financial institution was too big to allow to fail. |
| "With these transactions, the US government is taking the actions necessary to strengthen the financial system and protect US taxpayers and the US economy," the three agencies said in a statement. | "With these transactions, the US government is taking the actions necessary to strengthen the financial system and protect US taxpayers and the US economy," the three agencies said in a statement. |
| "We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks," they added. | "We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks," they added. |
| The cash injection will come from the $700bn financial bail-out fund created last month. | The cash injection will come from the $700bn financial bail-out fund created last month. |
| Focus on details | Focus on details |
| Many analysts believe the plan to rescue Citigroup will help reduce uncertainty in the market. | Many analysts believe the plan to rescue Citigroup will help reduce uncertainty in the market. |
| "We expect the US bail-out of Citigroup as well as Obama's promise of a major stimulus plan - with key Democrats suggesting numbers between $500bn and $700bn, much bigger than expected - to allow stock markets to gain across the globe, " said Dariusz Kowalczyk at CFC Seymour in Hong Kong. | "We expect the US bail-out of Citigroup as well as Obama's promise of a major stimulus plan - with key Democrats suggesting numbers between $500bn and $700bn, much bigger than expected - to allow stock markets to gain across the globe, " said Dariusz Kowalczyk at CFC Seymour in Hong Kong. |
| Markets are keenly awaiting for more details of the plan to be revealed. | Markets are keenly awaiting for more details of the plan to be revealed. |
| "Clearly, the market focus today will be on the release of a concrete rescue plan for the bank, details of which remain fluid; reports so far have noted that any infusion plan is provisional and subject to change," said Sue Trinh at RBC Capital Markets in Sydney. | "Clearly, the market focus today will be on the release of a concrete rescue plan for the bank, details of which remain fluid; reports so far have noted that any infusion plan is provisional and subject to change," said Sue Trinh at RBC Capital Markets in Sydney. |
| "Does this mean support for other financial institutions will be this big? Does this mean there will be more problems around calculation of so-called toxic assets? It's too early to say," said Tony Morriss at ANZ Bank in Sydney. | "Does this mean support for other financial institutions will be this big? Does this mean there will be more problems around calculation of so-called toxic assets? It's too early to say," said Tony Morriss at ANZ Bank in Sydney. |