Citigroup to use $36.5 billion on lending
Citigroup unveiled plans to use $36.5 billion of the $45 billion it got in bailout money on lending. The bulk of the money will go towards mortgage loans. Nancy Marshall Genzer reports.
The Citigroup Center in New York City. (Chris Hondros/Getty Images)
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STEVE CHIOTAKIS: Citigroup says today it's going to try to stimulate lending. The company will spend more than $36 billion on loans to consumers and corporations. It's about time. This is the bank that's received $45 billion in bailout money so far. Here's more from Marketplace's Nancy Marshall Genzer.
NANCY MARSHALL GENZER: Citigroup will pump about $25 billion into U.S. residential mortgages and mortgage securities. The rest of the money will be spent on loans to businesses, students and consumers. Why this sudden flow of cash? Citigroup could read the writing on the wall, especially after some comments from House Financial Services Committee Chairman Barney Frank. He says banks will have to lend more money to get more cash from the government.
Banking analyst Burt Ely says he hopes banks won't be pressured into making bad loans because of politics.
BURT ELY: The last thing we want to do is have the government telling the banks who to lend to, how much to lend to them, and at what interest rate. And we're rapidly sliding down that slippery slope.
The new loans come just in time for President Obama's distribution of the second half of the $700 billion bailout package. Citibank's critics say its new burst of lending is timed to ensure more government money. Ely says there's no proof of that.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
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