U.S. Treasury Admits that 2008 Bailout of Citi was Based on `Fear of the Unknown'Submitted by bobbyw24 on Thu, 01/13/2011 - 17:39
The U.S. Treasury Department’s 2008 rescue of Citigroup Inc., once the world’s largest bank, was “strikingly ad-hoc,” a government bailout watchdog said.
“While there was consensus that Citigroup was too systemically significant to be allowed to fail, that consensus appeared to be based as much on gut instinct and fear of the unknown as on objective criteria,” according to a report today from Neil Barofsky, special inspector general for the Troubled Asset Relief Program. “The conclusion of the various government actors that Citigroup had to be saved was strikingly ad hoc.”
Treasury in November 2008 gave Citigroup a $20 billion emergency infusion, on top of $25 billion received the prior month, from the $700 billion TARP fund