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The U.S. Treasury on Sunday declined comment on reports that Citgroup (C.N) was in talks that could result in the government taking a 40 percent stake in the company, but the department said it was open to converting preferred shares into common equity to strengthen banks.
Under the Geithner plan, this includes making sure that there is capital where it is needed, and that public support can be replaced with private capital as soon as that becomes possible, he added.
Earlier, a source familiar with the situation told Reuters that talks were ongoing between Citigroup and regulators that could increase the U.S. government's stake in the once mighty banking giant.
The Wall Street Journal said this could result in a 40 percent common equity stake held by the government, but Citigroup officials were hoping for a stake of around 25 percent.
Originally posted by daddyroo45
Well after "we" buy 40% of Citi group,and probably buy 40% of BoA.Then "we" can buy stock in Chase and a few other banks.Then when things really start getting bad,"we" will just merge all our "bank holdings" into one big massive government controlled bank.
Now won't that be great for competition?
Still, the regulators suggested keeping banks private is a priority.
"Because our economy functions better when financial institutions are well managed in the private sector, the strong presumption (of the program) is that banks should remain in private hands," the regulators said.
We continue to work with the U.S. government to evaluate potential new alternatives for addressing AIG's financial challenges," AIG said.
U.S. Treasury officials declined to comment. Weil could not be reached immediately for comment.
AIG shares closed down 1 cent to 53 cents on the New York Stock Exchange.
AIG has already gone to the government twice for help. It was first rescued in September after bad mortgage bets left it on the verge of collapse.