Federal regulators were considering a new rescue for Citigroup on Sunday, a step that could mark a third leg of the government’s broader efforts to bolster the nation’s financial industry, according to people briefed on the plan.

Under the proposal, the government would shoulder losses at Citigroup if those losses exceeded certain levels, according to these people, who spoke on the condition that they not be identified because the plan was still under discussion.

If the government should have to take on the bigger losses, it would receive a stake in Citigroup. The banking giant has been brought to its knees by gaping losses on mortgage-related investments.

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Filed under: * Economics, Politics • Economy • Credit Markets • Housing/Real Estate Market • Stock Market • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The September 2008 Proposed Henry Paulson 700 Billion Bailout Package • Politics in General

1. Byzantine wrote: “Industry?”  I suppose, assuming one believes that “industry” includes creating digital dollars and loaning them out to people who have to repay with dollars for which they had to exchange actual value. November 24, 5:10 pm | [comment link]

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