US Treasury silent on Citigroup stake reports

The US Treasury on Sunday declined comment on reports that Citigroup was in talks with US officials that could result in the government taking a 40 per cent stake in the company, but the department said it was open to converting preferred shares into common equity to strengthen banks.

Treasury spokesman Isaac Baker said under Treasury Secretary Timothy Geithner's bank stabilisation plan, institutions can apply to convert preferred shares into convertible preferred shares and later into common equity as needed to strengthen their capital structure.

"We are open to considering a request to do so if the institution and its regulator believe it would promote the long term stability of that institution, and if we believe it's in the best interest of long term stability of our economy and financial system," he said in a statement.

Follow Emirates 24|7 on Google News.