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KAI RYSSDAL: Here's a question about subprimes and the liquidity squeeze to set up our next story: How bad do you suppose it has to be for a bank to add what could be $49 billion of really bad debt to its balance sheet? One answer would be pretty darn bad. Because companies usually try to get stuff like that off their books. It's a way to dress things up and make you look more profitable. And it makes yesterday's decision by Citigroup to absorb that 49 billion in subprime-related problems all the more curious. Our New York bureau chief Jill Barshay has more.

Jill Barshay: Citigroup is just one of a number of banks that got caught by the subprime fall out. Those banks created $400 billion in investment funds backed by mortgage-related bonds. The funds have lost a lot of money.

Joe Scott of Fitch Ratings says Citi is now taking responsibility for its funds. He says the bank is making a commitment to give investors their money back.

Joe Scott: Well, the big reason is reputation. They want to protect the reputation of Citigroup.

Citigroup could have let investors suffer losses. Robert Howell is a professor at Dartmouth's Tuck School of Business. He says Citi is right to support its funds. If it didn't, it might have trouble doing business in the future.

Robert Howell: If I lent you money and you didn't pay me back, I might not be very interested in lending you money again.

Citigroup isn't the first big bank to step up to the plate. HSBC did something similar with $45 billion worth of its funds last month. Banks may be motivated by their own self-interest, but Howell says these bailouts could end up helping the sick financial markets.

Howell: I wouldn't be surprised if there will be a bunch of banks that'll do the same thing following Citi's lead. Maybe just to shore up the financial system and be a good citizen, take responsibility for creating instruments which were full of holes.

Those instruments could still leak red ink. But Scott at Fitch Ratings says he's not so worried about future write-downs from those funds. He says Citigroup's a $2.4 trillion institution and $49 billion is just 3 percent of that.

In New York, I'm Jill Barshay for Marketplace.