ECONOMY -- December 14, 2009 at 8:22 AM ET
Monday's Headlines: Citi to Repay TARP; Obama Meets With Bankers
--Citigroup announced Monday morning it struck a deal with the Treasury Department to repay $20 billion of bailout money. (Photo by Justin Sullivan/Getty Images.)
After weeks of trying to persuade regulators that it was sound enough to stand on its own, Citigroup announced early Monday that it has struck a deal with the Treasury Department to repay $20 billion of taxpayers' dollars it received under the Troubled Asset Relief Program.
Under the deal, Citigroup will replace $20 billion of the $45 billion in federal aid it received in the midst of last year's financial crisis by selling $17 billion worth of stock and by issuing another $4.2 billion in so-called tangible equity units and subordinated notes. The remaining $25 billion will not be repaid because the government converted it into an ownership stake in the bank earlier this year.
The agreement follows last week's announcement from Bank of America that it is has paid back the $45 billion it received under the TARP. By repaying the bailout, Citigroup becomes the last large Wall Street firm to exit the federal bailout program. The deal also helps the bank escape the heavy government scrutiny that accompanies federal aid, such as caps on both executive pay and dividends.
"We owe the American taxpayers a debt of gratitude," Vikram S. Pandit, chief executive of Citigroup, said in a statement. "As I have stated many times over the past year, we planned to exit TARP only when we were convinced that it was prudent to do so," he added. "By any measure of financial strength, Citi is among the strongest banks in the industry, and we are in a position to support the economic recovery."
The agreement between Citigroup and the Treasury Department comes as leaders of the nation's largest financial firms -- including Citi, Goldman Sachs, Bank of America* and JPMorgan Chase -- prepare for a meeting at the White House later today with President Barack Obama.
In an interview on "60 Minutes" aired last night, President Obama expressed his frustration with Wall Street, saying, "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street."
Speaking of bailouts, Abu Dhabi has announced it will lend $10 billion to Dubai in order to help its United Arab Emirates neighbor to pay off its spiraling debt.
Iran said Monday that the three Americans jailed since July for crossing the border from Iraq will go on trial.
The Senate on Sunday voted 57 to 35 in favor of a $447 billion spending bill to finance federal agencies and Cabinet-level departments. The House may follow up the Senate's action this week by voting to raise the federal debt ceiling by at least $1.8 trillion.
*For the record, Bank of America is a corporate sponsor the NewsHour.