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US officials say Citigroup rescue aimed at confidence

US government officials said the driving reason behind the decision to rescue Citigroup Inc was to try to restore confidence in the financial system and in big US financial institutions.

world Updated: Nov 24, 2008 12:19 IST

US government officials said the driving reason behind the decision to rescue Citigroup Inc was to try to restore confidence in the financial system and in big US financial institutions.

Speaking to reporters in the early hours of Monday morning after the dramatic rescue was announced, the officials said that Treasury Secretary Henry Paulson and Federal reserve Chairman Ben Bernanke had worked with officials throughout the weekend to get the rescue package in place.

New York Federal Reserve Board President Timothy Geithner, who is expected to be nominated later on Monday to succeed Paulson as Treasury secretary, also was closely involved.

Citigroup is putting up preferred stock and the government will receive warrants, convertible into common stock, as part of the cost of the loan protection. Officials said the government would not exercise voting power under any warrants they receive.