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Citigroup's Parsons spotted at White House

The incoming chairman of Citigroup, Richard Parsons, showed up at the White House, fueling talk that the federal government might take a massive ownership stake in the troubled banking behemoth.

india Updated: Feb 24, 2009 12:04 IST

The incoming chairman of Citigroup, Richard Parsons, showed up at the White House on Monday, fueling talk that the federal government might take a massive ownership stake in the troubled banking behemoth.

Parsons’ appointment was to see Valerie Jarrett, one of President Barack Obama’s closest West Wing confidants.

Parsons got through the main gate a little before 6 pm A White House official confirmed the meeting but declined to offer details.

"He was here to meet with Valerie - something she often does with business leaders," said the official.

News of Parsons' White House visit started a buzz among financial services executives in Washington, where several said Monday night that they expected an announcement of a Citigroup deal as early as Tuesday. One executive told POLITICO that the White House is telling industry players that the Parsons visit is "a friendly meeting."

The federal government is reportedly in talks to take as much as a 40 per cent ownership stake in Citigroup, whose stock price has been battered by speculation that the government might seek to “nationalize” major banks to stabilize the financial services sector.

White House Press Secretary Robert Gibbs on Monday reiterated Obama’s belief in the importance of a privately held banking system – even as the Treasury Department signaled that it’s open to the kind of deal reportedly being discussed by Citi. A unusual joint statement by the Treasury Department, Federal Reserve and other regulators on Monday also signaled the government’s willingness to do what’s needed to keep the nation’s banking system operating efficiently.

Parsons, the former head of Time Warner and one of the nation’s most prominent African-American businessmen, had been rumored as a possible pick for Commerce Secretary. But administration sources now say that job is likely to go to former Washington Gov Gary Locke.