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It’s (almost) half-official. To avoid the horror of out-and-out public ownership, the US government will swap up to $25bn of its $45bn preferred shares in Citigroup for common equity. Other holders of $27bn of preferred stock can also convert, with $12bn worth already on board. If everyone falls into line, Citi gets $52bn in common equity without additional investment by taxpayers and saves about $3bn in dividend payments. The government is left with a 36 per cent stake, existing shareholders are diluted to 26 per cent and non-government holders of preferreds get the remainder. Citi’s shares, having inexplicably rallied this week, on Friday swooned 39 per cent.

This may still not be enough. True, the extra loss-absorbing capital (at the top end) will boost Citi’s tangible common equity to 8.1 per cent of risk-weighted assets. But scepticism about banks’ risk models suggests investors are likely to focus on the ratio to total tangible assets at 4.3 per cent. That looks pretty healthy, with JPMorgan’s, say, at 3.8 per cent. But further losses on real estate-backed assets would deflate that cushion. And the latest plan does nothing to address the question of how those assets are valued on Citi’s books. The authorities’ forthcoming stress tests could yet mean Citi returns to trade in more government preferreds.

Anger that chief executive Vikram Pandit remains at his desk is to be expected. But it makes little sense to replace the boss now. Installing a new face would hardly denote a fresh start or lessen the likelihood that Citi winds up fully nationalised. The board shake-up is positive, though attracting heavyweight directors will be challenging. The deal is structured to give preferred holders an enormous incentive to convert. Taxpayers are short-changed, but that was expected. Half-measures, half-baked.

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