Citigroup to repay $20 billion of bailout funds
Well its a race to from under the “Pay Czar” and now Citibank is running as well so they can pay bonuses as well. I guess the bonus race is on these days. My question is if the government will be removing its $300 billion in guarantees for Citigroup loans and securities? If that is not withdrawn then is it clear that they are not from under the TARP program and they should still be under those pay constraints.
It is already bad enough that the U.S. taxpayers has bailed out and provided a backstop for our banking institution but now we are not seeing any real “thanks” for that gesture and more focus on getting clear of the rules that were setup so they can get paid before Christmas. Don’t be too dis-trot, this is greed working its magic, we setup the rules and they are following them so next time if we are satisfied with them, then we need to write better rules and that starts with people intelligently engaging their representatives so your voice and opinion is heard and taken seriously.
Education is the key in complex matters like finance and economics and that means you need to take some of your leisure time and dedicate it to learning about these matters if you want a different outcome than what we have gotten this far. That is a main reason I write this blog is to educate and force myself to be current by reading news on these subjects everyday.
Citigroup, recipient of the biggest U.S. bank bailout, struck a deal with regulators to repay $20 billion to taxpayers and escape government-imposed pay restrictions.
Citigroup, the only major U.S. lender still dependent on what the government calls “exceptional financial assistance,” will raise the funds with a sale of $20.5 billion of equity and debt. The New York-based company also plans to substitute “substantial common stock” for cash compensation, the bank said in a statement today.
Chief Executive Officer Vikram Pandit has pressed for an exit from the Troubled Asset Relief Program out of concern that TARP’s pay constraints make Citigroup vulnerable to employee poaching by Wall Street rivals. Bank of America Corp., the biggest U.S. bank, exited the program last week after paying back $45 billion of rescue funds.
“It’s great news,” Gary Townsend, chief executive officer of Hill-Townsend Capital, an investment firm in Chevy Chase, Maryland, said in a Bloomberg Television interview. “It’s important for Citi to exit these extraordinary agreements with the U.S. Treasury and the government as quickly as possible. It’s expensive perhaps, but I think it had to be done.”