This is the mystery that everyone is talking about. The government and Citi executives had sought to have the rescue of Citigroup in place by the opening of the financial markets in Asia. That was hours ago. So what’s holding up the bailout?
We’re told by a person familiar with the matter that the debate at the Treasury is multi-faceted. On the one hand, Treasury Secretary Hank Paulson is convinced that the government’s move should be an investment that could return money. This would involve the government paying not too far above market prices for the assets. One the other hand, the government wants to provide enough capital to Citi to guarantee that the bank will not longer be viewed as an ER patient. That argues for overpaying for the assets.
Our latest word from a source familiar with the matter is that the government is considering a hybrid program of an asset purchase and a new capital injection.
Business Insider Emails & Alerts
Site highlights each day to your inbox.