Citi may be ready to pay back TARP
A cable car passes a Citibank branch office in San Francisco, Calif.
TEXT OF INTERVIEW
Bill Radke: There are reports this morning Citi plans to join its bailed-out cousins
in getting out from under the restrictions that come with owing the U.S. taxpayer. Here to fill us in on the story is Marketplace's Ashley Milne-Tyte, she joins us live from New York. Good morning, Ashley.
Ashley Milne-Tyte: Good morning.
Radke: So what are some of those government restrictions?
Milne-Tyte: Well, all the big banks that got large infusions of government funds had to stick to government rules, including strict rules on compensation. And banking consultant Bert Ely says they really didn't like it:
Bert Ely: I think this is especially the case with Citi, since it, like Bank of America, had been subject to this extraordinary supervision.
Meaning they had the government's so-called pay czar, Kenneth Feinberg, kind of breathing down their necks and giving them what they thought of as excessive limits on how much they could pay people. And Citi's really worried about its ability to keep its top staff. They'd love to get some sort of repayment plan in place so it can show staff there is light at the end of tunnel, we are gonna stand on our own again, just to sort of keep people motivated.
Radke: And how much money is Citigroup intending to pay back?
Milne-Tyte: Well, they got $45 billion in bailout funds in all, but the government converted $25 billion of that into common stock -- so the government effectively owns a third of Citigroup. So it's the other $20 billion they want to pay back. And they're planning to raise the money in the stock market. There's also a possibility that they might raise some cash by selling some of their businesses, but it's not clear yet whether that's on the agenda.
Radke: Marketplace's Ashley Milne-Tyte joining us live. Thank you.
Milne-Tyte: You're welcome.