| By Eric Dash
Published: February 23, 2009 Nationalization, at least a partial one, seems inevitable for Citigroup. As Washington prepares to tighten its grip on the struggling company, the implications — for the troubled financial giant and the rest of the industry — are starting to sink in. Under a plan federal regulators were discussing on Monday, the government may end up owning as much as 40 percent of Citigroup, which has already grabbed two multibillion-dollar lifelines from Washington. The question is, what happens then? Perhaps not all that much, at least for now. Even before rescue No. 3 — which will not involve additional taxpayer money — federal regulators were clamping down on the company. The government has ordered Citigroup to sell businesses, shake up its board, cut its dividend and reduce risky trading. It has also moved to curb bonuses and perks like corporate jets. Moreover, Citigroup already relies on the government to finance its operations and insure hundreds of billions of risky assets. It has bowed to Democratic lawmakers on bankruptcy legislation that the financial industry had long opposed, and is now required to fill out a public report card on its lending activities monthly. Link to Article |