COMMENT Another weekend, another bank rescue. On Sunday night, the US Treasury moved to shore up Citigroup. There was no choice – the banking giant could not be allowed to keep stumbling. The rescue seems to have been generous to Citigroup, but the insurance scheme it uses is a model that deserves wider consideration.
Shaken by the announcement by Hank Paulson, the US Treasury secretary, that the troubled asset relief programme would not buy distressed mortgage assets, investors gave Citigroup a wide berth. Last week, its share price fell by more than 60 per cent.
