Citigroup chiefs 'questioned public bailout'

14 January 2011

A new report has revealed that a number of senior figures at Citigroup were opposed to accepting the firm's controversial government bailout in 2008, fearing the terms of the agreement were too onerous.

In a study published yesterday (January 13th 2010), inspector general of the Troubled Asset Relief Program (TARP) Neil Barofsky claimed the decision-making process behind the package had been "strikingly ad hoc".

"While there was consensus that Citigroup was too systemically significant to be allowed to fail, that consensus appeared to be based as much on gut instinct and fear of the unknown as on objective criteria," he stated.

Mr Barofsky called on regulators and lawmakers to set out a clear list of criteria to be applied in the event of any future crises and urged the Financial Stability Oversight Council to take pre-emptive steps preventing banks from working around rules.

Earlier this month, it was revealed Delaware-based bank Wilmington Trust had reclaimed $2 million in salary from chief executive Donald Foley, following concerns that the payments breached TARP legislation.

By Asim Shah

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