New Report Finds Citigroup Was On Verge Of Failing
A new report released on Thursday revealed that Citibank, the nation's third largest financial institution, was on the verge of failing in late 2008. According to the report, the bank was almost shut down on November 24, 2008.
The Huffington Post reported:
"We were on the verge of having to close this institution because it can't meet its liquidity Monday morning," said Sheila Bair, chairman of the Federal Deposit Insurance Corporation, during a meeting the previous Sunday night, according to the report by the Special Inspector General for the Troubled Asset Relief Program.
"Without substantial government intervention," said another FDIC official, bank regulators and Citigroup "project that Citibank will be unable to pay obligations or meet expected deposit outflows next week," according to the report.
Officials agreed that the bank needed more help, despite the fact that it had already received $25 billion in TARP funds.
The Wall Street Journal reported: "The federal government in November 2008 agreed to guarantee $306 billion in assets on Citi's balance sheet and injected $20 billion in fresh capital into the troubled financial giant."
The government ultimately turned a $12 billion profit for taxpayers after Citigroup repaid programs.
According to Thursday's report: ""While the year-plus of government dependence left Citigroup a stronger institution than it had been, it remained, and arguably still remains, an institution that is too big, too interconnected, and too essential to the global financial system to be allowed to fail."
Read more from The Huffington Post here and from The Wall Street Journal here.