Joint Statement by Treasury, Federal Reserve, and the FDIC on Citigroup, November 23, 2008: “The U.S. government is committed to supporting financial market stability, which is a prerequisite to restoring vigorous economic growth. In support of this commitment, the U.S. government on Sunday entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital.

As part of the agreement, Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup’s balance sheet. As a fee for this arrangement, Citigroup will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In addition, Treasury will invest $20 billion in Citigroup from the Troubled Asset Relief Program in exchange for preferred stock with an 8% dividend to the Treasury. Citigroup will comply with enhanced executive compensation restrictions and implement the FDIC’s mortgage modification program.” [Term sheet – PDF]

• News release: Citi Adds $40 Billion of Capital Benefit through Agreement with U.S. Treasury, Federal Reserve, and FDIC
• USA Today: 52,000 jobs to be cut at Citigroup – “Citigroup’s reduction is the largest job-cut announcement from a company since 1993…cuts…will affect 15% of its global workforce, and come on top of 23,000 jobs that have already been eliminated from January through September, for a total of 20% from its peak of 375,000 at the end of 2007. The company also said it would cut expenses 20%.”
• Bureau of Labor Statistics – Extended Mass Layoffs (Quarterly) News Release: “In the third quarter of 2008, employers initiated 1,330 mass layoff events that resulted in the separation of 218,158 workers from their jobs for at least 31 days, according to preliminary figures released by the U.S. Department of Labor’s Bureau of Labor Statistics. Layoff events reached their highest level for the third quarter since 2001, while separations reached their highest level since 2003. The total number of layoff events was 312 higher in the third quarter 2008 than the same period a year earlier, and the number of associated separations increased by 58,134. Third quarter 2008 layoff data are preliminary and are subject to revision.”
• Related postings on financial system